One Delta, 156,594,962 people, 26,000 NGOs, 600 Microfinance Institutions, 99th rank on the Social Progress Index (ahead of peer South Asian Association for Regional Cooperation [SAARC] countries: India, Pakistan and Nepal), Five Millennium Development Goals on track for achievement, – Bangladesh has made tremendous developmental progress in the last few decades.

Bangladesh has a vibrant social-impact landscape and the current narrative has been relentlessly driven forward by a diverse set of ecosystem players. Donor interest and conducive public policy, combined with the efforts of national-level organizations like BRAC and Grameen, have contributed greatly towards shaping the development paradigm in Bangladesh. Nobel Peace Prize winner, Muhammad Yunus, set the stage for development with his phenomenal success in using micro-credit as a cost-effective, scalable weapon to fight poverty. USAID’s Feed the Future initiative aligns with the Government of Bangladesh’s sixth five-year plan to improve agriculture and food security. Additionally, there is a new wave of young entrepreneurs with international exposure who are keen to support the start-up eco-system and replicate market-driven models to achieve development goals.

Yet, there are many chapters of the development story that remain unwritten…

Why do over 45 million people continue to live in poverty?
Where can the country look for a solution to end its food deficit?
What must be done to end the thousands of preventable deaths of mothers occurring each year?
Who holds the key to helping the nation build up resilience to natural disasters and solving its energy crisis?
How can Bangladesh realize its commitment to becoming a middle-income country by 2021, its 50th year of independence?

Bangladesh is currently at a pivotal point in the history of its development story – it is imperative to redefine the dominant narrative and mobilize additional resources that can magnify the impact of existing efforts. Impact investing potentially holds the key to unlocking substantial private capital to address pressing socio-economic challenges in Bangladesh. The concept refers to investments that are intended to create positive social impact beyond financial return – advocating that the two are not necessarily mutually-exclusive. The practice of grant making and donor funding have traditionally been considered separate from investing in both objective and approach, but the emerging field of impact investing creates the opportunity for a productive collaboration between these two disciplines. The goal of impact investing is not to substitute these mechanisms, but instead to tap into a much larger pool of commercial capital, endowments and fiduciary investments that can augment the impact of traditional sources of mission-oriented capital.

Estimated to reach US$1 trillion by 2020 (WEF, 2013), impact investing has the potential to introduce a whole new spectrum of private-sector investors into Bangladesh. The role of field-builders in the impact investing space should, consequently, be to catalyze both sides of the equation: supply and demand. The supply side can be developed by designing inclusive ‘on-ramps’ for investors with varying risk-return appetites and re-endogenizing social and environmental considerations into investment decisions. It is equally important to nurture the demand side of the equation by fostering the development of high-impact business models that are investment-ready and can effectively deploy this capital. This will enable impact investors to effectively scale innovative new models that can drive, support and accelerate positive change in a sustainable way, taking Bangladesh to the next level in its development story.

Catalyzing the impact investing space could help Bangladesh not only to harness the potential of private capital to advance the development agenda, but also to serve as a voice for progress in the region and beyond.

 

By Natasha Garcha
Business Development & Partnerships
IIX & Shujog