Expanding Impact Investment to boost economy

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Alexander Irwan
Priv. Doc.

“As the most recent investment scheme in Indonesia, not many businesses apply impact investing, as a business may face major barriers to enter the market. The G20 Presidency of Indonesia helps to emphasize economic recovery and the creation of investment schemes that generate social and environmental impacts,” explained Irwan, Director of the Ford Foundation in Indonesia. 

The Ford Foundation recognizes the benefit of impact investing schemes and supports the establishment of a platform for impact investing in Indonesia. At the 2022 AVPN Global Conference “Advancing Impact in Asia Using Principles for Social Investment”, Patricia Sosrodjojo, a venture capital investor at Seedstars International Ventures and a member of the impact investing task force in Indonesia, said that only a few investors are willing to invest, take risks and provide resources for start-up businesses to initiate impact investment activities at an early stage. “These businesses require support to generate profits and have a sustainable social and environmental impact,” said Patricia. 

She continued to mention research conducted by ANGIN (Angel Investment Network Indonesia) in 2020, pointing to the significant rising number of investors and funders for impact investing; however, transactions are still few in number, which indicates a financing gap. Stakeholders should collaborate to tackle the funding gap. 

“Social investors must innovate to face the challenges of rising inequality and pandemic recovery. Several solutions on the market are present to address the financing gap. Collaboration between impact investing stakeholders is very important to develop the right solution, in accord with the local context,” said Patricia added.