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Impact investing key to unlocking Kenya’s growth potential

  Feb 17, 2014

Speaking on the sidelines of a one-day workshop on impact investing in Kenya at the Strathmore Business School, Eme Essien Lore of Rockfeller Foundation observed that impact investing is where a company seeks to make profit that is below the market rates or good enough to compensate capital.

“This is a robust business model capable of improving the living standards of the community,” she argued. Lore, a senior associate director in the Africa region underscores that a business engaged in impact investing by making reasonable profit, above the return on capital, but able to sustain the company to expand tend to offer services to more people.

George Njenga, dean at Strathmore Business School also argues that impact investing or social entrepreneurship remains key to assisting the Kenyan economy grow and assist a good number of people get employed and acquire wealth, rather than few getting richer at the expense of majority.

“Enhancing the productivity of more people by enabling them perform their functions is the key to starting a business,” he stated.

“A profit margin of eight per cent to 15 per cent or just above market rate by a business to improve the living standards is considered an impact investing,” he explained.

However, he reckons that profit margin should be good enough to sustain the business and ensure that it does not collapse.

He, however, argues that majority of the listed companies are driven by the desire to make higher profits to satisfy their demanding shareholders, as impact investing is least of their concern.

Participants of the workshop strongly felt that it’s upon the government to create policies that favours impact investing by offering incentives to corporates and in the process more of its citizens stand to benefit from the opportunities created.

He argued that his firm imports solar panels from Germany at a cheaper rate compared to the ones assembled locally that is heavily taxed.

Source: Courtesy of Standard Digital

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