What is Social Financing?
There are many forms of social financing for social entrepreneurs. These include (but are not limited to) impact
investing, microfinance, social impact bonds, and social enterprise lending. This type of financing requires both a
social dividend and a financial return. Nfban will primarily focus on encouraging impact investing in social
entrepreneurship and investor participation in SIBs.
What is Impact investing?
The biggest challenge for today’s social entrepreneurs and the non-profit sector is scale. With the restraints that
are inevitably put on acceptable expenditure by philanthropists (by far their primary funder), the necessary scale
that is needed for the best impact on society is unachievable. This is where Impact Investing fits in. Impact
investments can be made in both emerging and developed markets, and target a range of returns from belowmarket
to above-market rates, depending upon the circumstances.
Impact investing is about giving social entrepreneurs and organisations access to the same capital that for-profits
have. It allows them to scale into a profitable business while fulfilling a social and/or environmental necessity. By
financing innovative approaches, impact investing also has the potential to help deliver services more efficiently
and, in some cases, tackle the underlying causes of social and environmental issues instead of just trying to cope
with their consequences.