RSM’s Partnerships Resource Centre’s mission is to enhance the effectiveness and impact of cross-sector partnerships by leveraging evidence-based knowledge that is tailored for use by practitioners. Given its commitment to research on inclusive and sustainable growth through partnering and inclusive business, the PrC was invited by the Netherlands-African Business Council, one of the Africa Works! organisers, to host a workshop entitled ‘Financing Inclusive Business Models,' which drew audiences from NGOs and the private sector.
The business case for impact investing
In the workshop PrC’s Dr Addisu Lashitew introduced impact investing; investment that creates societal value above and beyond financial returns for its shareholders. He explained that for a long time, impact investing meant microfinance for the poor but the concept is now expanding with new and dynamic impact investors joining the market.
Lashitew: “As inclusive and sustainable business comes mainstream, impact investing that targets these businesses will also become a norm.” He said that while that might take time, a survey conducted by PrC among 400 businesses was encouraging. More than half of the respondents in the survey consider creating societal impact to be profitable.
A ‘missing middle’ of inclusive businesses
The workshop was followed by an expert panel discussion involving four experts from Dutch development bank FMO, as well as ING bank, Enviu and the Dutch Ministry of Foreign Affairs. The panel, chaired by PrC’ founder Professor Rob van Tulder, expounded a range of discussion points from impact measurement to the challenges and opportunities of impact investing.
One particular point of discussion was the idea of a ‘missing middle’ of inclusive businesses: commitment to societal impact is confined to small social enterprises at one end of the spectrum and large corporations such as Safaricom in Africa or Philips and Unilever in Europe, at the other. Participants discussed how to bring social impact to the mainstream, especially to the vast SMEs that account for much of economic production.
View the PrC’s sustainability research.
The Africa Works! Conference bring together NGOs, companies and knowledge institutes to inform, inspire, and connect the Dutch private sector with the various regional industries of Africa. The conference was founded by the Netherlands-African Business Council (NABC) and the African Studies Centre (ASC Leiden) in 2012. This 2016 edition, held on 10-11 November, addressed the financing of business in Africa’s growing economies, with an eye to Dutch foreign direct investment (FDI).