Social Finance & Impact Investing: The Power Couple You Need to Know

The term on the market’s lips right now is “social finance.” A modern way of managing money and a sibling of sorts to impact investing, social finance aims to ensure that good is being done with the money that flows through the marketplace. Private capital for public good.

Social finance is vital for a healthy, fair society. It ensures that money created in a society goes towards the improvement of said society through microfinance, social impact bonds, sustainable projects, etc.

The fact that there is such interest in social finance right now is a great thing and a sign that we are moving in the right direction.

If the concept behind social finance feels familiar it’s likely because it’s a partner—or a parent—to impact investing. Using money to make a solid difference while benefiting the benefactor.

It is also not a brand new concept. The Social Finance Foundation was created in 2007 to help the Irish population and the Social Finance Academy is already up and running. Canada saw the first emergence of the concept in 2010.

If it’s already part of the business world why is it suddenly big news?

Governments and businesses are coming to terms with the incredible importance and potential that exists in social finance and are putting in the groundwork to make a solid impression in social finance.

In Canada the national government is gearing up to position itself as a social finance leader, providing $755 million in seed money to revitalize our social services sector new businesses.

It’s also creating a Social Innovation and Social Finance Strategy to ensure everything plays out right.

The current heightened interest and investment in the field means it now has the potential to make a real difference in its intended targets and we have the chance to make a better world.

With interest in the field growing and the US’s Social Impact Partnerships to Pay for Success (SIPPRA) Act now in play 2019 will likely be a big year for companies working in the field—provided they play their cards right.

Look at (the aptly named) Social Finance. This initiative has been operating for over 10 years in both North America and the UK and aims to use social impact bonds (or “Pay for Success Financing”) to help push forward social progress.

Social Finance’s work in the social finance field will make a real difference in the lives of veterans, low-income families and people struggling to re-enter the workforce. It’s work that needs to be done and we have to hope that the changing market means the company will see greater support and success.

Social finance is set to make an impact across the globe, helping humanity achieve a level of equality we have long been seeking.

Private capital for public good. This is what we need to finally solve issues that have been percolating for generations and this is what MCE Social Capital is aiming to do.

The company aims to assist entrepreneurs in areas that don’t have easy access to first-world financial services, providing needed economic opportunities to the underserved. Operating in 30+ countries, MCE has proven that the concept works and has helped fund countless businesses and microfinance institutions.

Plus, by focusing on women and women-run businesses, the company is working towards greater gender equality.

We need social finance, as social finance and impact investing will both prove to be key components when it comes to ensuring we meet the Sustainable Development Goals. In fact, according to the Global Impact Investing Network (GIIN) a large percentage of impact investors are tracking their performance against the SDGs. This is important, as the actions of these investors and the initiatives they support are our best bet at making sure our world can continue.

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