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

Tuesday, March 1, 2016

In Southern Africa, the big action in impact investing is in South Africa. But even in that country, there are a great many challenges.

Those are some of the findings of The Landscape for Impact Investing in Southern Africa, a new report from the Global Impact Investing Networkand Open Capital Advisors.

South Africa was the location for three-fifths of deals from venture capital firms and non-development finance institution (DFI) funders and 30% ofinternational DFI agreements. (For a breakdown of how impact capital was disbursed in countries other than South Africa, take a look at the chart).

Why has the vast majority of the $22.53 billion in impact capital in the region been disbursed in South Africa? For starters, it’s the economic and financial capital of the region and the second largest economy in Africa, according to Abhilash Mudaliar, research manager of the GIIN, with a large and comparatively advanced financial system. Like Kenya in East Africa, the country acts as a local hub for impact investors. In addition, South Africa features an active group of domestic DFIs, which have disbursed around $25 billion through 7,500 deals in South African companies.