ABSTRACT
Africa needs more investment, but it also needs a smarter, more impactful investment. Impact investing presents the opportunity to leverage private sector dynamism on the continent to achieve greater and more sustainable development impact than traditional public sector and aid investments. The four main providers of impact investment capital in Africa are: development finance institutions (DFIs); private foundations; institutional investors; and private equity (PE) and venture capital (VC) funds. DFIs were designed to provide financial products to initiatives that promote development. Private foundations are playing an increasingly important role in the development of the impact investment sector in Africa. PE, VC and other investment funds in Africa are on the rise. They are providing financing along the investment spectrum, from seed capital in early stage enterprises to equity investments in large-size business with regional expansion potential. Impact investing can support the solutions that provide much needed products and services at the base of the pyramid (BoP) and solve development challenges.
