Impact Investing’s Next Hurdle: Better Networking

Friday, November 30, 2012

Tess Mateo is a matchmaker. Her job is to interest private investors in projects throughout the world that will improve the quality of life for people and protect the environment. It is not unusual for her to touch down on four continents in the same number of weeks.

She is not complaining.

As founder and managing director of CXCatalysts, her mission is to bring together governments, institutions, corporations, universities, investors and NGOs to scale sustainable businesses and projects in a dozen emerging countries. High on her list of passions are clean energy, sustainable food, infrastructure, waste management and public health. At the recent Wharton Social Impact Conference, she was among the participants in a panel discussion on evaluating returns from microfinance and other impact investments.

Impact investing is a broad term for directing money toward projects that bring about social change while delivering a market-rate return or better. Microfinance generally means making small loans to micro entrepreneurs, such as coffee growers in Costa Rica, weavers in Peru, mobile phone co-ops in Laos, apron makers in Guatemala or rice farmers in Tanzania. Small loans can be like winning the lottery for millions of people in the world existing on the equivalent of $1.25 a day. Microfinance operates on the assumption that poor people — also referred to as the “unbanked” — can pull themselves out of poverty if given access to financial services — a hand-up instead of a hand out. About 2.5 billion people in the world lack access to financial services, a status that limits their ability to plan for emergencies and for the future.

Source: Knowledge@Wharton (link opens in a new window)

impact investing, microfinance