Pacific Social Enterprises Boosted by Partnership to Drive Impact Investment
4 October 2017 at 8:38 am
Social enterprises in the Pacific will be boosted by a new Australian government program partnership, which aims to invest in social enterprises that deliver economic empowerment for women.
The Pacific Readiness for Investment in Social Enterprise (Pacific RISE) program is an Australian government-funded initiative designed to create an impact investment market in the Pacific.
Pacific RISE will partner with DFAT aid for trade program, Pacific Trade Invest Australia (PTI), hoping to generate $5 million worth of private capital into 20 Pacific Island businesses over the next three years.
PTI Australia has worked with Australia’s private sector for more than 38 years, developing trade deals with businesses from 16 Pacific Island countries.
Pacific RISE’s facility manager, Amanda Jupp, said this partnership would formalise an already strong relationship with PTI Australia.
“This partnership will enable Australian investors to access PTI Australia’s extensive networks and contacts with Pacific-based businesses,” Jupp said.
PTI Australia’s trade commissioner Caleb Jarvis told Pro Bono News the partnership would identify investment opportunities in Pacific businesses while helping social enterprises to access investor deal flows.
“That’s our mandate, to go out and attract investment. In the past we didn’t have Pacific RISE so we struggled. But when they arrived on the scene we saw a natural synergy,” Jarvis said.
“So we started working closely with them and as they brought new investors and intermediaries in, we took these new players to the Pacific Islands region and introduced them to key stakeholders [allowing them] to do their due diligence.
“Our strength at PTI is we’ve got great networks. We know the enterprises and that’s how this partnership has come about.”
More than a quarter of Australia’s total aid budget ($1.1 billion) will be invested in the Pacific in 2017–18, but Jarvis said this development assistance alone was not enough.
“There are not enough investable enterprises in the region… and it’s been really difficult to attract new investment into the Pacific Islands,” he said.
“Pacific RISE aims to crowd in new players and the reason we’re pushing impact investors is because they really have a different outlook, looking for a financial return, but also either a social and environmental return as well.”
DFAT has looked to facilitate greater private-sector investment and better trade links between the Pacific and Australia, and Jarvis said the region was well-suited for impact investing.
“This is the case because investors simply chasing a financial return are going to struggle to get an immediate return on their investment in the region,” he said.
“Impact investors are well suited here because they are looking for that social and environmental return.
“Often they can be patient… if they can come in and find the right type of investment they can present a blended type of package, between debt and equity. This makes impact investing perfect for the region.”
Pacific RISE utilises gender lens investing, which focuses on making investments in businesses that have a positive impact on women.
Jupp said the additional obstacles for women in the investment scene, such as unequal access to property and credit, prevented them from growing their businesses.
“Working with PTI Australia, who have already engaged with a large number of women-led, Pacific-based businesses and have such a great investment record, makes great sense,” Jupp said.
“Our two Australian-funded initiatives can now maximise opportunities, share resources and reduce duplication to support more Pacific-based businesses.”
Jarvis added that it was critical there was a strong investment to empower women in the Pacific community.
“Getting more women involved in business is good for business, and the woman have always had an important role to play here historically [but] business in the Pacific has always tended to be a male domain. That does need to change, so we can see greater diversity,” he said.
“This [gender lens] strategy is really at the forefront of the enterprises and the investors and it’s just building the profile of what empowering women in the Pacific Islands is all about.”
Jarvis was hopeful of a bright future for social enterprises in the Pacific, but said things were still at a fairly early stage.
“Impact investing in the Pacific is very new. It’s been at play across other regions for more than a decade, but it is very well-suited to this region,” he said.
“There is a lot more work to be done on both sides of the equation. We need to bring in more investors and we need to get more social enterprises on-board to take investments as well.
“That will take ongoing support… but over time as we get more businesses and investors involved, we will create better jobs and drive economic growth throughout the region.”