The AGSM Social Impact club proudly presented the Investing for Impact event at
AGSM Kensington on 19th August 2014 with the goal of exploring the developments
within a continuum of social finance, spanning areas such as Social Enterprise,
Corporate Philanthropy, Microfinance and Development Banking. We were fortunate
to have representatives from Asian Development Bank, European Investment Bank,
Westpac Institutional Bank, Social Enterprise Consulting and the UNSW Business
School present with the aim of providing a rounded perspective on a field of growing
global interest.

Erik Aelbers (ADB) opened in explaining the differences existing between social
enterprise and inclusive business. Social enterprise is often driven by not-for-profits,
philanthropy and non-government organisations, whilst inclusive business would
incorporate private firms as well as multilaterals such as ADB that seek viable
projects from a social and an economic point of view.

In the following the speakers agreed that shortage of funding is not the main
obstacle to create impact, rather the challenge lies in enabling these funds to be
channelled to the most viable projects and to achieve capacity building on the
ground for the recipients to manage these projects according to set goals.
Furthermore, with an increasing number of people and community organisations
displaying the will and making available funding to instigate societal change,
there remain issues of procedural inefficiencies, and lack of business planning, and technical expertise, which limit the ability to turn this goodwill into commercially viable businesses. Speakers agreed these were areas in which the skills of an MBA graduate can contribute, to harness the dollar invested in social enterprise.

The panel discussed the Social Impact bonds in Australia in detail. In explaining the impact of social finance projects, Craig Parker discussed Westpac had, in 2013, established structured Social Benefit Bonds in conjunction with the Commonwealth Bank, the NSW Government and the Benevolent Society which has since brought financial securitisation for community organisations, such as Women’s Health, emergency housing and employment opportunities for disadvantaged and Indigenous families.

The discussion then went on to Microfinance where Adam Bruun (EIB) explained the role Microfinance has played in developing countries and poverty alleviation, such as lending to female entrepreneurs in small villages in building sustainable businesses. However, before many businesses can thrive, there is a need for multilaterals, such as EIB and ADB, to invest in key infrastructure projects, such as energy, transport and telecommunications. Taking the example of telecommunications in Papua New Guinea, Erik elaborated that microfinance has now grown from beyond lending only, but now to also enable community saving, remit, transfer of money and purchase of insurance too, possibly facilitated by mobile technologies.

With social finance being an area of perpetual learning, and issues arising such as lack of common industry terminology, research on products and investment case to derive lessons learned and, most importantly, methods of impact measurement, Professor Adam explained universities could help plug the skills gap in this field. He noted that universities do currently teach the basic models that are used in social finance, which are not dissimilar from those in conventional finance. However, universities could do more in teaching about context and externalities involved in social finance. For example. externalities involved in social impact bonds include the data collection abilities of the government, along with increasing collaboration between all levels of government. Professor Adam discussed social investments could be more lucrative if externalities were made clearer.

The overall feedback for this club event was extremely positive and will hopefully see AGSM students contributing to growth in this industry in their future career roles, as well as spark thoughtful business discussion on global impact.

- Jisha Ramachandran, Bjoern Werner and Christopher Chong