The Launch of Impact Exchange

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                                                         IIX©

IIX has partnered with Stock Exchange of Mauritius (SEM) to launch the world’s first public trading platform for Social Enterprises, enabling everyone to participate in impact investing. “It’s surreal but supremely exciting,” said Durreen Shahnaz when launching the Impact Exchange at the Impact Forum on the 14th June. “This partnership with the SEM to develop Impact Exchange is an important step in consolidating the interest from impact investors globally to two regions that have the most potential to impact millions of lives for the better.”

Impact Exchange provides a unique opportunity for Asian and African SEs to raise investment capital to scale and deepen their social and environmental impact, while offering Impact Investors the opportunity to invest in and trade securities issued by SEs that reflect their values. By increasing liquidity, transparency and standardizing social and environmental impact reporting, Impact Exchange will enable Social Enterprises to access a global and diverse set of investors.

Impact Exchange is the last piece of the capital-raising continuum for Social Enterprises. IIX and Small World Group’s Impact Incubator platform supports seed-stage Social Enterprises, while IIX’s Impact Partners platform focuses on growth stage Social Enterprises. Mature Social Enterprises will now be able to raise capital through Impact Exchange. In a collaborative move to strengthen and standardize the impact investing sector, Nexii’s role in Impact Exchange has been transferred to IIX. With effect as from May 6 2013, IIX has taken over the cooperative management of Impact Exchange with the Stock Exchange of Mauritius (SEM).

At the Impact Forum, in an interesting discussion between the key parties involved in making this a reality, Durreen Shahnaz (IIX), Robert Kraybill (IIX), Shamin A. Sookia (SEM), Sanjay Sinha (M-CRIL) and Matthew Greene (Kota) shared their thoughts on the launch of the Impact Exchange, and how it is going to work.

Robert Kraybill informed the audience gathered for the launch that Impact Exchange will facilitate the issuance of bonds, equity, and funds. Through the work that IIX has already been doing in this space – connecting Social Enterprises with mission-aligned capital—there is currently a pipeline of issuances for each of these categories. It is likely that the first issuance will be bonds, to be followed by funds – but the most exciting will be equity, which will bring in more retail investors. IIX’s role in the Impact Exchange will be to assess and screen potential issuers’ social and environmental impact and monitor compliance with impact reporting standards.

Shamin Sookia highlighted Mauritius as a strategic location for such an exchange – with 46% of FDI to India passing through Mauritius, it is a platform to link Asia and Africa to the rest of the world. With SEM’s experience operating two existing boards and being recognized as Africa’s most innovative stock exchange by Africa Investor, the SEM is well placed to operate the Impact Exchange. With the platform, regulatory framework and listing rules ready, the SEM looks forward to welcoming the first pioneering issuer onto the Impact Exchange.

Sanjay Sinha is among the first group of Impact Exchange’s Authorized Impact Representatives (AIRs), who will be responsible for conducting due diligence for the Social Enterprises, assessing their social impact and financial returns, as well as ongoing monitoring of their performance. Sanjay Sinha is confident that Impact Exchange will help to facilitate the flow of capital to Social Enterprises.

Matthew Greene highlighted that Kota Global Securities, having experience in the social space through their sister company Kota Global Social Ventures (KGSV) are well placed to be engaged in the Impact Exchange. The liquidity that the exchange will bring over time will be a key factor in stimulating impact investing – both at the institutional and retail investor levels.

The panelists invited the audience to join them at the beginning of this exciting journey – as issuers, investors and supporters – looking forward to the first issuance on the Impact Exchange within a year, establishing the platform for Social Enterprises to access capital at scale and deepen their social and environmental impact.

 

By Urvi Doshi, Business Development, IIX