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The amount committed by impact investors into Kenyan enterprises is expected to double to Sh123 billion ($1.2 billion) within the next five years, a new study by US-based consultancy FR LLC and University of Virginia Business School shows.

The rise of social impact investors — who invest in firms or projects that will have a wider social impact such as high job creation — is opening up an additional funding stream for start-ups which have traditionally relied on private equity and venture capital funds for financing.

The study titled “The State of Social Impact Investing in Kenya” that was carried out over a nine-month period found that social impact investors have pumped in about Sh62 billion ($600 million) into Kenyan enterprises in the last decade although this is still less than a quarter of the $2.6 billion total raised by private equity firms over the period.

“Social impact capital is a growing investment flow in Kenya representing up to $600 million in shareholdings in over 200 companies in East Africa with an additional $650 million in the pipeline for investment,” the survey report reads.

Photo courtesy of GotCredit.