NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, March 1, 2012

A stock exchange solely for social enterprises is in the works in Singapore

FOUNDER and chairwoman of Impact Investment Exchange Asia (IIX) in Singapore Durreen Shahnaz is seeking to create the Impact Exchange a social enterprise exchange. “By investing through the Impact Exchange, impact investors can significantly lower their market research and due diligence costs, as well as have liquidity in their investments thus allowing for more impact and wealth to be created and brought into the space,” she says.

For many social enterprises, the quest to build capital is a difficult one. The simple fact that they may not be able to generate returns for investors creates a big hurdle for them.

On the other hand, investors that are seeking to make investments that benefit society (impact investments) may not know how to look for the appropriate social enterprises to invest in that are profitable and suit their personal passions. The costs of market research and due diligence is quite high, and there is no liquidity for these impact investments.

Therefore, through the exchange, these issues can be dealt with.

The IIX is a social enterprise with a mission to provide social enterprises in Asia with greater access to capital, enabling them to expand the impact of their activities more rapidly.

Pioneers for what would be Asia’s first social enterprise exchange in a couple of months, Shahnaz and her team at IIX sought to create the exchange to bridge the gap between investors and social enterprises. The Impact Exchange will list social enterprises in the Asia-Pacific region and would expand to other parts of the world.