Impact Investing

Let me introduce you to a new investing wave; impact investing.

Many people are realizing that it is not just enough to accumulate more and more money. They are starting to think about what effect their investments have to the people, how they change lives and how the society view the investments. This has been coined as the impact investing.

Now back to Kenya, do people care about what their investments mean to the citizens? the likes of Chris kirubi, Manu Chandaria,Kenyatta Family, joshua kulei and many more who could make the billionaires list, what do they think of the consumers of their goods? Is it only a money-product relationship or is there something more to that?

I am always intrigued by the business mantra of safaricom, Transforming lives. Do they really transform lives? My lecturer back in college labeled Safaricom profits as immoral, exploitative and wrong, this triggers the re-thought, really? A rough skim on how the company has transformed lives will take you to the MPESA services like paybill and now lipa na MPESA which are changing the way SMEs handle cash, how it is simpler to transact and to ensure cash security.

The future of investments, company performances and public relations will be  anchored on the impact the company has to the society and the community at large. What value does the products add to the betterment of human life; socially, economically or even psychologically.

This reminds me of the late Starehe boys' center founder, Mr griffins. It is indisputable that he made a living from the institution, but no body ever ponders how much he was worth, because that was not important to him. His was impact investment, and almost every locality in Kenya can point to a beneficiary of Starehe boys' Centre.

Home Afrika, the newest entrant to the NSE through the GEMs, had its business policy pinned on providing cheaper housing to the growing middle class. their achievements have surpassed their expectations as they reap from a real estate boom in Kenya projected to survive another couple of years. The investors saw a human problem, provided a human solution and in the process benefited hugely as people appreciated the new standards of housing at affordable rates.

Financial analysts, investment banks and fund managers have departed from the balance sheet, or even the profit and loss statement analysis, albeit partially. There is increased inspection into the dealings of the company, compensation to executives ( as they are paid bonuses if they meet targets, the better the compensation the bigger the possibility that the company met targets) and lately the impact of their dealings. Investors want to know the sustainability of their investments and if they will continue making returns on the long run.

The value of the impact investment cannot be ascertained, for now. The bottom point is that as we usher the era of business rivalry as opposed to competition, information symmetry occasioned by technology seepage and product in-differentiation, consumers will raise the standards to establish why the should stick to a certain product. Impact of the business of the company will come to mind.
Definitely, how a consumer can identify with the product will be key.

The chain will spiral back to the financier or the investor to a company, either a loaner or shareholder. Morality may drive business, let's wait and see.