Impact investing in South Africa is gaining momentum, moving beyond a buzzword to attract both development and commercial investors. Sibonakaliso Mavuka, Social Investment Specialist at Tshikululu Social Investments, emphasizes that social investors are uniquely positioned to lead this transformative movement.
Impact investing, which seeks both social and financial returns, aligns closely with the decades-long work of social investors who have prioritized social impact through programmatic and grant-based investments. With their deep understanding of social outcomes, social investors are well-equipped to guide the growing impact investing sector, which now sees organizations launching dedicated funds to pursue these dual objectives.
Unlike commercial investors, social investors have access to risk-tolerant, patient capital through grants, which are treated as a 100% financial loss. This allows them to explore untested markets, pursue long-term horizons, and take on higher risks to prove innovative business models aimed at improving lives, particularly for the poor.
Mavuka highlights that social investors can play a pivotal role by using grant funding to pilot and validate impactful business models. Additionally, through guarantees or layered financing structures, they can de-risk projects, attracting finance-first impact investors and commercial capital to scale solutions.
With billions of Rands at their disposal, social investors have a unique opportunity to shape the future of impact investing in South Africa. Mavuka urges them to embrace this moment, lead critical conversations, and drive action to mainstream impact investing, creating lasting social and economic change.
