Why impact investing in Afghanistan?

Most businesses around the world mainly focus on the financial return as the number one priority rather than the social and environmental impacts of their business. Therefore, the conflicting impacts on society from their businesses (lack of alignment of their business goals with SDGs goals) have caused them to pay billions of dollars for the gray areas they left in their business operation. Also, as the financial return is their priority, this conflict of interest has led them not to invest in the most challenging societies or high-risk environment, such as Afghanistan and other countries with similar contexts. Therefore, Impact Investing as an emerging concept in the market along with other aspects is addressing these challenges and open the door for global investors to invest where their business investments highly impact the society. 

Based on GIIN, Impact investments are:

Investments made to generate positive, measurable social and environmental impact alongside a financial return. Impact investments can be made in emerging and developed markets and target a range of returns from below market to market rate, depending on investors’ strategic goals. The growing impact investment market provides capital to address the world’s most pressing challenges in sectors such as sustainable agriculture, renewable energy, conservation, microfinance, and affordable and accessible basic services, including housing, healthcare, and education. To learn more about “Impact Investment, click here

At Tamveel, our team is working on access to finance and seed funding for early-stage entrepreneurs in Afghanistan. with all the challenges such as, Security, an unstable economy, and the donor-dependent government made investment challenging for investors to invest in Afghanistan. But being part of the solution to this problem has always been our goal. To read more about Tamveel as one of the first Impact Investing Platforms in Afghanistan, click here

Before launching the Tamveel Impact investing Platform, our team initially planned to launch acrowdfunding platform to address investment issues in Afghanistan. But due to Afghanistan’s banking law and lack of public awareness, specifically for not having legal framework in place it wasn’t feasible.

Though our team couldn’t launch the crowdfunding platform but still we were passionate to work for this cause and contribute towards access to finance facilitation in Afghanistan. We found that impact investment was the best option considering our context as its number one priority is social and environmental impact rather than secure  financial return. However, Traditional investment institutions’ main focus is financial return only. Thus, Global and local impact investors can invest in Afghanistan despite all ongoing challenges to address those challenges through social and/or environmental impacts and Tamveel will facilitate and can manage the investment process.

Based on our Chief Strategy Officer, Matiullah Rahmaty (2019), “Considering the following points, impact investing can be considered as the solution to the investment problem in Afghanistan:”

High growth of impact investing around the globe, according to the survey done by Global Impact Investing Network on 2018, this industry comes with an approximate valuation of 230 billion USD with an expected growth of 84% and impacting the lives of more than 1 billion people by 2020. Thus, it is highly expected to find a niche in the Afghanistan market, and that niche is nothing else but emerging startups with high potential to grow at a global level.

Impact is the one important element to consider when it comes to impact investing. Those investors care about the idea’s impact rather than the amount of return, which represents a higher risk than the usual investments. It gives us an important lesson, and that’s the interest of people to consider the meaning, not only the money, when it comes to investment and making things happen.

To read more about Matiullah Rahmaty- Afghan Social entrepreneur and founder of BrightPoint Consulting Service, click here

To conclude, Impact investing has emerged in the market to help businesses to align their strategic goals with SDGs so that to minimize the negative social and/ or environmental consequences and to increase sustainable impact alongside financial return. This new industrial trend has come to exist in Afghanistan since only few years now and one of the main platforms “Tamveel Impact Investing platform” to facilitate financial and management support to startups whose businesses have potential sustainable impact.

 

If your business idea address any of the SDGs for sustainable impact, there is a chance for you to benefit from our service. Our Tamveel team are there for you for financial, management and technical support. Also, we can assist you as part of the investment process and management if you are an impact investor.

You can reach us through email at: behesha.nazir@tamveel.com

Leave A Comment