Impact Investing and Subsidised Finance – 3 Key Takeaways

Digital technologies have become well recognised as key drivers for social innovation. This has attracted growing interest and funding from impact investors (those seeking social impact alongside financial returns). Digital Innovation Hubs (DIHs) are at the centre of catalysing innovation to address social challenges and create positive impact in their local ecosystems. It is therefore crucial for DIH leaders to have an understanding of impact investing and subsidised finance to be able to attract funding for their programmes as well as better support their start ups to benefit from these opportunities.

AfriconEU, the first Trans-continental Networking Academy for African and European Digital Innovation Hubs in partnership with African Technology Business Network (ATBN) hosted an online webinar on “Impact Investing and Subsidised Finance”. 

Alforde Charumbira, a global social impact and investing strategist at Utando Social Impact Solutions introduced the participants to the fundamentals of impact investing and subsidised finance, the key players and funders within the impact investment and finance landscape and what impact funders are looking for when raising impact finance.

You can watch the webinar here.


The 3 key takeaways from the webinar are summarised below:


  • Impact Investing has and keeps evolving: 

Recognizing the evolution of impact investing is pivotal. Understanding its historical roots, from early negative screening practices to its contemporary focus on measurable social and environmental impact, provides a foundation for digital innovators. 

Alforde took us back in time by explaining how impact investing has been in existence since the 17th or 18th century. The olden days impact investing was mainly based on negative screening which refers to the process of finding companies that score poorly on environmental,social and governance (ESG) factors related to their peers. 

Examples of the first few impact investors are the Pax World Fund and the Pioneer Fund. The Pioneer fund, which is also an American non-profit foundation, was established in 1937 “to advance the scientific study of heredity and human differences”. The modern day impact investing is about investing into a social cause to generate positive measurable social and environmental impact alongside financial returns. It underscores the importance of aligning ventures with a social mission, emphasising that genuine change is at the heart of successful impact investing.


  • The idea of impact investing is that stakeholders want to see some social change:

Businesses or enterprises are more profitable than social enterprises. The delicate balance between profitability and social impact must be acknowledged. While digital enterprises often have the potential for substantial financial returns, it is essential to remember that the true essence of impact investing lies in driving positive change. Entrepreneurs need to resist the temptation to prioritize financial gains at the expense of their social mission, as sustaining this equilibrium is integral to impact-driven success. Alforde addressed this concern about striking a balance between achieving social impact and gaining market returns from impact investing. The driving idea of impact investing is to see some social change hence when that is not achieved, the enterprise is said to be failing. He shared from his experience how many social entrepreneurs after gaining some financial returns fail at efforts to strike the balance. They tend to focus more on the financial returns causing the social returns objective to suffer, thus making it unrealistic to attain a balance. Stakeholders of social enterprises need to understand this and prioritize making social impact in order to stay on track with their objectives.


  • What impact funders are looking for when raising impact finance: 

Lastly, understanding the sectors that attract impact investors and the criteria they use when evaluating projects is vital. African Fintechs, Clean energy, Agriculture and Education are areas that are currently attracting investor attention. Before investing, impact investors investigate if the ideas/ventures centre people and the planet and whether they are going to improve people’s lives. As digital innovators, clearly articulating how your venture or idea meets these objectives can enhance the appeal of your projects to impact funders. Also demonstrating how your digital innovations will tangibly improve people’s lives and contribute to broader societal and environmental goals can set your venture apart in the eyes of investors and help you get the funding you’re looking for.




In conclusion, digital innovators and entrepreneurs stand to benefit immensely from embracing the principles of impact investing and subsidized finance. These principles not only open doors to funding opportunities but also provide a compass for navigating the evolving landscape of socially conscious entrepreneurship. By balancing profit and purpose, understanding investor interests, and championing positive change, digital innovators can not only thrive financially but also make a lasting impact on society and the planet.


Watch the complete session on YouTube to learn more about Impact Investing and Subsidized Finance.

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