Today is a special day as we commemorate our seventh anniversary! These past seven years have been a remarkable journey, filled with pivotal moments, significant investments, and pioneering endeavors. As we take this opportunity to reflect on our journey, we are thrilled to share with you the seven defining moments that not only shaped our journey but also paved the way for our long-term vision.
We have ventured into uncharted territory throughout this journey, driven by our commitment to positively impacting the world. We’ve observed the power of impact investing to bring about meaningful change, and we’ve endeavored to push boundaries and challenge the status quo. These seven achievements exemplify our commitment to creating a better future and serve as evidence of the tremendous progress we’ve made together.
Join us as we explore these milestones that have transformed our identity and continue to inspire us as we look to the future. It is a journey deserving of celebration, and we are grateful to have you with us every step of the way.
1. A Unique Company with a Commitment to Transparency and Innovation
As we celebrate our seven-year journey in the field of impact investing, it is evident that SIMA Funds is anything but conventional. What truly distinguishes us is our dedication to forging enduring change and transforming the traditional investment landscape into a potent catalyst for positive social and environmental impact. Since our inception, our mission has been to improve the lives of our ultimate customers at the Bottom of the Pyramid. We achieve this objective by providing demand-driven commercial capital and advisory services, thereby fostering the expansion of profitable businesses with financial, social, and environmental footprints.
Our vision inspires us to relentlessly pursue the acceptance of social investments as a legitimate asset class for commercial investors. Thus, the livelihoods of low-income communities throughout the world are improved. At the center of our voyage is our unique culture, which is characterized by transparency, logic, fairness, teamwork, innovation, and entrepreneurship. We aim to be the vanguard of a new generation of transparent and inclusive businesses, setting the gold standard for everyone. We are committed to serving both our borrowers in need of capital and our investors anxious to make an impact. As we commemorate seven years of impact, our resolve to transform the landscape of impact investing burns brighter than ever, and we eagerly anticipate continuing our journey of leaving an indelible mark on the world.
2. Transforming Impact Investing: SIMA Funds’ Trailblazing Trio of Funds
A defining chapter of our seven-year journey revolves around the emergence of three pioneering funds that have transformed the impact investing landscape. These funds have brought together a variety of institutional, impact, and development finance investors, igniting a surge of transformation in the world of double-bottom-line enterprises.
The Off-grid Solar Fund I, a luminary in the off-grid solar sector with an impressive USD 90 million fund, represents our first innovative achievement. Over the course of four years, this visionary initiative has woven together public and private sector investors, providing crucial debt financing to fuel the expansion of off-grid solar companies and microfinance institutions offering solar products. It played a crucial role in assisting solar home system companies as they introduced pay-as-you-go (PAYG) solutions in underserved markets, while simultaneously expanding the participation of microfinance institutions in delivering off-grid solar solutions.
The Emerging Distributor Finance Fund (EDFF) is our second defining characteristic, transforming the financing landscape for small and medium-sized off-grid solar and sustainable cooking last-mile distributors (LMDs). The EDFF is a catalyst for change because it addresses the critical debt financing gap encountered by these tireless distributors striving to provide energy access to remote and underserved consumers.
The Energy Access Relief Fund (EARF), our third flagship fund, takes center stage by providing subordinated, unsecured, and low-interest subsidized loans to energy access companies struggling with liquidity issues caused by COVID-19. Focusing on small to mid-sized businesses committed to serving consumers at the base of the pyramid, the EARF provides vital financial support during these difficult times. It has provided approximately 121 loans, the majority of which were for amounts under $1 million, spanning from $50,000 to $2.5 million. A streamlined underwriting procedure guarantees rapid disbursement of funds, with the quickest loan disbursed in a remarkable seven weeks from the start of due diligence.
These three funds collectively represent SIMA Funds’ dedication to generating positive social and environmental change through innovative impact investing. Each fund is a beacon of optimism, illuminating the path to a future in which impact investments generate lasting change for our global community.
3. Pioneering the Code of Conduct for the Off-Grid Solar Sector
The creation of a Code of Conduct for the Off-Grid Solar Sector, which was spearheaded by SIMA’s Off-grid Solar Fund I, stands out as a significant achievement in our seven-year journey. This accomplishment transcends monetary success and exemplifies our dedication to fostering ethical practices that drive enduring change and elevate entire industries toward greater sustainability and social responsibility.
This innovative initiative has repercussions far beyond our financial investments. It demonstrates our commitment to ensuring that the sectors in which we invest are founded on solid ethical principles. This accomplishment is truly remarkable due to the domino effect it caused. The GOGLA association was inspired by our Code of Conduct, prompting them to adopt a similar code. It demonstrates SIMA Funds’ visionary leadership and commitment to establishing industry standards.
This initiative’s impact cannot be overstated. The adoption of the code by the GOGLA association has reverberated throughout the off-grid solar industry, garnering widespread support. It represents the industry’s collective commitment to uphold ethical standards and practices. This achievement demonstrates our firm conviction that impact extends beyond investments; it includes ethical practices that drive lasting change and elevate the entire industry toward a future marked by sustainability and social responsibility. As we reflect on our voyage, we are proud of our part in catalyzing this transformation, knowing it paves the way for a brighter and more accountable future.
4. Launch of the SIMA Impact Foundation
In the tapestry of our seven-year voyage, the establishment of the SIMA Impact Foundation is a prominent thread. This foundation, a 501(c)(3) public charity in the United States, serves as the philanthropic arm of SIMA Funds LLC. Its mission is to resolve the urgent needs of low-income individuals at the base of the pyramid through impactful investments. Recognizing that not all impact investment opportunities are commercially viable, the foundation aggressively pursues higher-risk and below-market rate financing to support the growth and sustainability of essential impact investment sectors. It is reminiscent of industries such as microfinance, which in their infancy relied on higher-risk concessionary capital to flourish.
Central to our foundation’s initiatives is a scholarship program that cultivates future leaders in impact investing, particularly in underserved regions. We provide full tuition assistance to meritorious low-income students pursuing business degrees, with a particular emphasis on Sub-Saharan Africa and South Asia, where impact investing is still in its infancy. Our scholarship recipients acquire practical experience through internships at SIMA LLC or through our network of partnerships. This experiential training prepares them to become future leaders in the field of local impact investing.
In our first year, the SIMA Impact Foundation collaborated with business institutions such as The Citizens Foundation in Pakistan, Strathmore University in Kenya, and Makerere University in Uganda to award 14 undergraduate students with scholarships. Motivated by this initial success, we intend to expand the scope of our scholarship program to include more students from additional countries. To realize this vision, we seek $225,000 in donations, which will be allocated judiciously over a four-year period. In addition to supporting 25 students annually for four years, these funds will also cover a variety of associated costs, such as the hiring of a grant administrator/mentor, the provision of internship stipends, training costs, and travel expenses for the scholarship recipients. The SIMA Impact Foundation remains committed to shaping a brighter and more inclusive future through education and impactful investments as we turn to the future.
5. Sow Good Investments: The Innovative International Impact Investment Platform
Sow Good Investments is the crowning achievement of our journey, for which we are incredibly proud. As a division of Social Investments Managers and Advisors (SIMA), this platform exemplifies our commitment to democratize impact investing.
At Sow Good Investments, we’ve made it our mission to enable both accredited and non-accredited investors to participate in opportunities that generate positive societal and environmental impact while also providing the opportunity to build wealth. We are dedicated to the financial well-being of our investors and perpetually investigate potential credit enhancements to provide them with a safe investment environment.
Our method is straightforward yet highly effective. We begin by thoroughly verifying companies that are actively engaged in making significant social and environmental contributions and are seeking capital. Next, we cultivate a community of investors who share a common interest in supporting double-bottom-line companies, especially in sectors such as solar energy, affordable housing, and microfinance. By selling notes pursuant to Regulation A+, we pool investor funds, which are then used to fund these mission-driven initiatives. In addition to participating in initiatives that promote positive change, investors receive annual interest payments on their investments. They have the option of redeeming the value of their bonds upon maturity or reinvesting, empowering them to contribute to a better world while potentially expanding their financial portfolios.
This achievement demonstrates our commitment to making an enduring impact in the world of impact investing. As we move ahead on our journey, we remain committed to providing opportunities for everyone to participate in initiatives that generate significant change and contribute to a more sustainable and equitable future.
6. Kitchen Table Discussions to Address Persistent Challenges
Another defining moment that has influenced our dedication to fostering positive social and environmental change is the Kitchen Table Gathering, which took place in The Hague from 3 to 5 April 2023.
This gathering was much more than a simple discussion; it was a crucial dialogue that explored the unrealized potential of the off-grid solar industry. It arose as a direct response to the persistent obstacles encountered in the domain of impact investment, particularly in the off-grid solar industry. Despite commendable progress, it was obvious that the electricity access divide, which affected over 730 million people, remained a formidable obstacle. The ambitious goal of attaining universal access to clean and modern electricity appeared still distant, with estimates indicating it could take at least 17 years to close the gap.
Despite its immense potential, the off-grid solar industry has encountered unforeseen obstacles. Even after a decade or more of operation, off-grid solar companies’ business models have not produced the expected results. These difficulties were profoundly ingrained in the off-grid solar industry, and they were exacerbated by the supply chain disruptions caused by the unprecedented COVID-19 outbreak.
Considering the urgency of the situation, SIMA, in partnership with various collaborators, took the initiative to convene the Kitchen Table Gathering. Before forging a path forward, this event gave industry stakeholders a crucial opportunity to pause, reflect on the challenges they confronted, and recalibrate. Prior to this crucial gathering, SIMA conducted exhaustive research, including interviews and industry surveys with over fifty participants, including representatives from off-grid solar companies and various stakeholders. The objective was crystal clear: to identify and acquire a thorough understanding of the most significant challenges facing the industry and to reach a consensus on the way forward.
These Kitchen Table Gatherings exemplify our devotion to addressing impact investment’s enduring challenges. They are evidence of our commitment to nurturing collaboration among a diverse range of stakeholders and our pursuit of innovative solutions that illuminate a brighter and more sustainable future. As we reflect on this remarkable journey, we look forward to continuing our mission to make a significant global impact.
7. Affordable Housing Finance Company in Pakistan
We are delighted to highlight one of our most recent achievements: the establishment of Pakistan’s first affordable housing finance company. This accomplishment exemplifies our dedication to driving positive change and transforming the conventional investment landscape into a propelling force for significant social and environmental progress.
Asaan Ghar Finance Limited is more than a financial institution. It is founded on the bedrock of ethical double-bottom-line principles, where profitability and profound societal impact coexist in harmony. Our fundamental mission is to enable middle-class individuals to realize their goal of homeownership, accumulate valuable assets, and improve their overall quality of life.
We are proud to be a customer-centric organization that leverages the power of technology to automate and expedite the end-to-end customer onboarding process, thereby providing an exceptional customer experience. Our commitment to ethical finance is reflected in our registration with the Securities and Exchange Commission of Pakistan (SECP) as a housing finance company. This innovative initiative is promoted with pride by Social Investment Managers & Advisors, LLC (SIMA), United States.
In accordance with our core mission, we are committed to providing the middle class with simple, convenient, and prompt Islamic Home Financing options. Our goal is to enable them to increase their assets, thereby contributing to a more prosperous and vibrant Pakistan. This achievement exemplifies our dedication to making an enduring impact, one that will continue to resonate for years to come. As we embark on the next phase of our journey, we are enthusiastic about the possibilities that lie ahead, and we reaffirm our commitment to driving positive social and environmental change through innovative impact investing.
Our journey throughout the past seven years has been nothing short of extraordinary. Our sincere appreciation goes out to our partners, team members, and the communities we serve. Together, we have made a significant difference in people’s lives, and we are more determined than ever to continue fostering innovation, equity, and sustainability in the coming years.
As we gaze into the future, we see a world in which impact investment paves the way for a brighter and more equitable future. We cannot wait to see what the future contains, as SIMA Funds will be at the forefront of this transformation.
Thank you for being a part of our journey, and here’s to many more years of creating positive change together!
With gratitude and excitement,
The SIMA Funds Team