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Giving Compass' Take:
• An article at Stanford Social Innovation Review delves into the important opportunity to expand and innovate impact finance in Latin America.
• How might it be important to develop country-spanning investments in Latin America? What will it take to inspire cross-sector collaboration for effective impact finance in Latin America?
• Read more about the social implications of impact finance in Latin America.
After almost 10 years, impact finance remains a niche market in Latin America, though it continues to grow toward mainstream acceptance. To understand where the field in the region has been, where it might go, and the insights it offers to other parts of the world, it is important to understand it as a whole and through a closer look at a few nations.
Mexico, Colombia, and Brazil are important because of their economic robustness and the relatively advanced incorporation of impact finance into their markets. Ecuador, as a nation that has made far less progress with impact finance, reveals important challenges and opportunities for the field. Each country and the region as a whole have many stories to tell when it comes to the scale at which they've embraced impact finance, the infrastructure and institutions they possess to support the field, and the insights their experiences provide.
Several countries in the region still display some of the highest income inequality levels in the world, according to the World Economic Forum. Economic development and climate change are important issues. Public health expenditure as a portion of GDP continues to rise, a high-priority problem for the region that has been exacerbated by the COVID-19 crisis.
Investors in the region understand that social development is a high priority and tend to align with the SDGs that reflect that focus, such as no poverty, decent work and economic growth, and reduced inequality. Concern with gender and Indigenous rights is still relatively nascent.
Exactly how Latin America moves forward remains unclear, but it will certainly require strong collaboration among governments, financial institutions, development banks, universities, and investment managers.
Read the full article about impact finance in Latin America at Stanford Social Innovation Review.