May 19

Impact Investing and COVID-19: A Moment for Growth or a Flight From Risk?

By Adva Saldinger

The impact investing community is grappling with how the coronavirus crisis will affect growth and how entrepreneurs searching for capital in low-income countries will fare.

The past few weeks have seen the launch of a number of new coalitions and efforts to better collaborate. Some see an opportunity for financial industry transformation and impact mainstreaming, while others worry that money may flee for what some investors perceive as safer investments.

The economic shock of the COVID-19 pandemic has led most investors to lose money, many to adopt a sort of holding pattern, and a large amount to pull back on investments in low-income countries. The United Nations Conference on Trade and Development is predicting that foreign direct investment globally could drop by 30% to 40% from 2020-2021, and significant decreases have already been seen in sub-Saharan Africa in a number of months.

Photo courtesy of Sudipto Sarkar.

Source: Devex (link opens in a new window)

Coronavirus, Investing
impact investing