A New Model for Impact Investing: Application of Impact Units to Assess Feasibility of Social Investment Opportunities and Interventions in Kenya

ideas4action@wharton.upenn.edu Africa, IdeaHub, Infrastructure & Economic Development

An important driver of achieving Sustainable Development Goals, impact investing encourages social interventions that increase access to basic services such as finance, healthcare, education, clean water, and energy. Despite the growth in African economic activity, the need for high impact social interventions remains high.1 The generally low level of development in Third World countries continues to provide opportunities for impact investing through the creation of products and services that contribute to improved social, financial, and environmental welfare of local beneficiaries.

East Africa is one of the centers of global impact investing, with a disbursement of more than US$9.3 billion over the past five years.2 Kenya accounts for nearly half of the impact capital disbursed in East Africa. However, there is little evidence of differences that can be traced to specific impact investments. Results sometimes appear ambiguous, and many claims attributed to impact interventions are often unsubstantiated.

Our proposal introduces an impact performance measurement and valuation tool (“Impact Units”) that will enable impact creators (such as local innovating companies, or non-profit organizations, or for-profit institutions running Community Social Responsibility (CSR) initiatives) to develop social interventions that demonstrate real and measurable impact as measured and certified by our proposed Impact Units.

In summary, the impact creator (most likely an entrepreneur) develops interventions targeting social impact, we (Wylde International) convert the benefits of the interventions into Impact Units which then enables the impact creator to source for buyers of the Impact Units depending on the extent of the fit between the Impact Units buyers’ objectives and the impact creators’ interventions.

The resulting better fit between the impact buyers’ objectives and the impact creators’ interventions increases the possibility that the most deserving of beneficiaries get to benefit from creators of socially inclined interventions.

Team Wylde International
Valentine Korir , Assistant, Human Capital Development, Wylde International Ltd. (2015)
Kiriinya Kithinji , Director, Strategy and Advisory, Wylde International Ltd.