Scaling Impact Investments, By Clement de Alcala

Impact investments account for only 0.05% of the total amount of money invested via crowdlending. One may ask why this is. In other words, why are only a fraction of peer investors focused on impact ?

Our team at JAMY recently conducted a pilot project in Uganda, where we asked 50 people from our network to invest in social companies. 25 of these people were from the impact ecosystem and the other 25 from outside of this ecosystem. 56% of the impact community invested in the social companies we identified, whilst only 8% of the conventional investors (7 times less) invested.

In his blog Seth Godin notes, “if we experience what people experience, if we know what people know and if we believe what people believe, then we will certainly do the same.” Impact investors know that impact investing can financially perform as well as conventional investing. Impact investors also trust that their investment in social companies will bring about social and environmental good to the community they operate in and beyond.

Observing the crowdlending ecosystem, it is difficult to blame the 99% of the people who do not invest in impact. Less than 1% of all existing crowdlending platforms focus on impact. These platforms mainly target an already committed group of social investors, with limited communication tools, in Europe and North America.

Our contention is that, if we manage to increase awareness about impact investment through high quality and easy to share content, while providing investors with financial gain, we can encourage a lot more peer investors to become Impact investors. Based on our modest experiment, multiplying actual impact crowdlending by 7 would avail $1.4 billion in loans to social companies, every year. It may very well be worth investigation further.