May 06, 2011
In a conversation with the Huffington Post about the rise of social enterprise, Aleem Walji of the World Bank Institute's Innovation Team on the Future of International Development discusses the importance of standardized impact measurement.
From original article:
"The challenge has been in measuring non-financial impact. Investors may be willing to accept lower financial returns if they can measure precisely they are achieving in meeting health, education or water outcomes. The emergence of industry standards for social metrics, industry associations like GIIN (Global Impact Investing Network) are all very promising and will help unlock additional sources of capital motivated by some combination of financial and social objectives.
"Capital is often but not always the primary constraint. The challenge is matching the right kind of capital with the needs of entrepreneurs at a particular stage of development. Cash-flow based lending and access to working capital for example, are still rare in much of Africa and South Asia and yet that's what many early stage entrepreneurs need. Rationalizing the deployment of capital — that is understanding when grants are the right instrument, when equity can play a role, and when debit is appropriate — is key to helping the sector grow. And from the perspective of the World Bank is critical in leveraging private resources to complement public capacity in meeting the needs of the poor."