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ICReport:
Supporting investment in inclusive business and social enterprises

Supporting investment in inclusive business and social enterprises: Best practice for policymakers and investors in ACP countries

Executive Summary

Mobilising private capital to deliver social and environmental benefits in African, Caribbean and Pacific countries is vital if the Sustainable Development Goals are to be met. ‘Impact investment’, an approach to investing whereby positive social and/or environmental impact is sought alongside financial return, has much to offer in this respect. More and more capital is seemingly being deployed in this way, both across ACP countries and globally, but questions remain about its scale
and impact. Part of the problem is that the loose, all-encompassing definition of impact investment belies an overly narrow framing of what in practice are deemed investable opportunities. How to maximise the impact of impact investment in ACP countries, and where other tools and supports are needed to address financing gaps and help more businesses scale, is the focus of this paper.

This report focuses on trends in the supply of impact capital, especially finance that is offered with an expectation of both financial return and positive social and/ or environmental impact. It follows a companion report on the demand for finance from social enterprises and inclusive businesses in ACP countries. In line with the aims of the ICR Facility, this report makes a number of recommendations to build ecosystems in ACP countries that support greater and more varied private sector investment in inclusive businesses and social enterprises. It is aimed at policymakers, investors, donors, and other institutions which influence the business environment and investment climate and have an interest in sustainable development.

The report is part of the ICR Facility’s series of Knowledge Products on innovative finance solutions.