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

Wednesday, December 19, 2012

Demographic pressures and years of under investment in meeting social needs suggest that Egypt will not be able to provide jobs, housing and basic services without adopting a wide strategy for inclusive development. Impact investing should be encouraged as one of the strategy’s pillars.

Impact investing has, at its core, the objective of inclusive development. It drives capital directly to the sectors and enterprises that naturally address social and environmental issues. It applies sound investment principles because it recognizes the need for profitability in ensuring an enterprise’s success. Impact capital comes with the added benefit that it brings higher standards of conduct to the economy. It is wired to encourage collaboration and to build networks that enhance potential impact and inclusiveness.

Opportunities for impact investors

There are compelling business arguments for impact investors to look to Egypt, and conversely, for Egypt to encourage impact investing as a means to address its core development issues. Egypt has a population of 83 million, with a growing need for basic services and jobs. To policy makers and government, this is a major challenge. To impact investors and social entrepreneurs, however, this is a large underserved market in high impact sectors such as access to utilities, affordable housing, education, healthcare and nutrition.