The Pacific diaspora as drivers of impact investment
Two impact investments facilitated by PTI Australia – Tanna Coffee and Coconut Cluster – have shown the potential of impact investing to drive sustainable economic growth and support the development of value chains. However, not all Pacific businesses are ready to take on the level of private investment required for impact investing, due to not having appropriate financial and governance systems in place.
Post-GFC, finding investors has been difficult. With a lack of investment-ready opportunities and market understanding, there’s the perception that Pacific investment is high risk. A view that’s forced many in the Pacific to reassess their investor strategies.
While the big end of town remains well funded and microbusinesses are supported through microfinance agencies, friends, and family, a gap in support for small to medium businesses persists.
Small to medium sized businesses present the ideal conditions for impact investment, where investors, attracted to the social and/or environmental return, are more patient about seeing financial returns. But impact investment readiness is highly variable.
While remittances play a vital role in Pacific economies, a growing number in the Pacific diaspora are seeking ways to contribute to the region beyond remittances. That is, using their expertise, networks, and capital to prepare businesses for impact investment. This investment (financial or otherwise) enables businesses to grow and change their risk profile and, in so doing, fills a vital gap in the impact investment ecosystem.
Connecting with diaspora
The Pacific diaspora in Australia play a vital role in growing the impact investment space in the Pacific, driven by their strong cultural and emotional connection to the region.
The value that the Pacific diaspora brings was reinforced when I led PTI Australia’s Business Mission to Samoa in October 2018. Together with …read more