While many Bangladeshi MSEs are in businesses that address a social or environmental need, most institutional impact capital has eluded small enterprises in favour of large companies. This is due to constraints in the MSE impact investment ecosystem: MSE pipeline development, due diligence, investment monitoring and impact evaluation. As such, MSE-focused impact funds struggle to be commercially viable. Unlocking impact capital would improve the overall MSE financing environment since this would be an alternative to traditional debt, which is not always the best (or most flexible) form of growth capital.
The Consortium, led by ACACIA SRIM Limited, will bring to market the Impact MSE Platform and the proprietary SR-MSE Impact Fund focused on socially responsible MSEs. This will be (re-)usable in subsequent investment rounds, by traditional returns-focused investors, as well as by other impact investment managers, helping to replicate and strengthen the MSE impact investing ecosystem in Bangladesh.
Project Impact MSE will introduce digital disruption to sustainable development and bring an innovative solution to one of the most intractable problems of MSE impact investing by enabling intelligent sourcing, selection & monitoring of investees; and evaluating impact with a rigorous statistical approach. To execute this project, ACACIA has partnered with other platform providers & MSE/tech pioneers in the local market.
Project Impact MSE expects to deploy at least BDT 120 million in impact capital to 600 MSEs by the end of 2018 through a proprietary impact fund, which is expected to have BDT 300 million in assets under management (AUM) at that time.
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