An investor in Hong Kong wants to secure her children's economic future. But, she also wants to use her wealth to address the social and environmental challenges she cares about and thereby leave a broader legacy. She becomes convinced that simply giving her money away cannot be the only way she can make a difference. So, she redirects her assets into investments that preserve her wealth and also directly tackle problems of poverty and environmental degradation.A group of friends volunteering for a nonprofit organization look for ways to help reduce poverty in rural Mexico. They stumble onto the idea of lending small amounts to poor people who cannot access loans from banks. But they struggle to secure donations and instead take on loans. When their success exhausts their available charitable capital, they convert to a for-profit enterprise and eventually hold an initial public offering on the Mexican stock market that raises more than $300 million. Suddenly they find themselves in the middle of a global media storm, lionized as saviors and vilified as greedy capitalists.A senior investment banker in New York decides to shift career tracks to contribute to the fight against global poverty. But instead of leaving Wall
This chapter presents an overview of the topics and debates discussed in the book. It starts by explaining the definition of social finance, relating it to other, sometimes rival, terms (social investment, impact investing, blended value investing, and so on) and notes the scale of activity and policy interest, and the culturally constructed and contingent nature of what is social in these contexts. The various drivers of these developments are explored, the range of instruments of social finance are outlined, and the emergent market structure in social finance is described. Current issues and debates are then summarized, before presenting brief synopses of the topics discussed in each of the chapters. The introduction concludes by outlining three scenarios for the future of social finance.
The chapter begins by establishing a definition for this market and discussing the main contexts and trends that can be observed shaping its development. A section on key characteristics follows that covers such issues as geographical spread and diversity, sectoral spread, financial instruments, and risk and return profiles. It then discusses the emerging market structure of impact investing and give an account of the important role of policy in shaping and supporting the field. The chapter then moves on to consider future directions, opportunities, and challenges. The arguments and analyses of the chapter as a whole are finally summed up in a conclusion. Throughout the chapter short case examples provide important real world grounding to the analysis and commentary.
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