ABSTRACT
This chapter discusses the impact investment sector in Central America, its current status, how it has grown, and its future potential and how lessons learned thus far can be used else-where in the world. It utilizes World Economic Forum's definition of impact investing: "an investment approach that intentionally seeks to create both financial return and measurable positive social and/or environmental impact". The chapter outlines a few investors that each represents a different approach to impact investing, including fund structure, financial instruments used and types of investees focused on. Potential investees are primarily composed of corporations, small and medium-sized enterprises, social enterprises, microfinance institutions, cooperatives and community development finance institutions. Impact investing represents the form of investment that recognizes the incompleteness of purely profit motivated economics and the limited role the "invisible hand" can play in distributing benefits to society based purely on traditional economic decision-making.
