Target Impact Sectors

Business, when done responsibly, is one of the central drivers for the development of human civilization. Advances in technology and other innovations are creating more opportunities and business models directed to the vast market at the Bottom of Pyramid. When done responsibly, these businesses can be an important and profitable tool for development. Microfinance, the mother ship of impact investing, started to bring business concepts to development at the grassroots level only about 30 years ago. Institutional investors only started to see the opportunity in impact investing about a decade ago.

In this short period, microfinance has seen tremendous growth and innovation and has been the basis for development of impact investing.  Impact investing now exceeds $700 billion with thousands of businesses that meet social objectives.  SIMA is focused on Energy Access, Financial Inclusion, Affordable Housing, and Education in sub-Saharan Africa and South Asia.

 

Solar Energy 

Off-grid solar is a sector at the intersection of financial access and energy access.  SIMA manages three off grid solar funds:

  • SIMA Off-Grid Solar and Financial Access Senior Debt Fund I, B.V. (2017)
  • SIMA Angaza Distributor Finance Fund B.V. (2020)
  • Energy Access Relief Fund B.V. (2021)

In addition, SIMA is developing a fund in the commercial and industrial solar area. This will invest in projects and offer financing to solar developers in Sub-Sahara Africa, South Asia and Southeast Asia.  This is is targeting smaller dev in emrging countries.  Please contact us if you would like further information.

There are 1.4 billion people in the world without access to electricity, and off-grid solar, commercial and industrial solar and minigrids are the lowest cost means of bringing access to electricity to hundreds of millions of these people. Affordable lighting and energy brings immediate benefits of having more economic and educational opportunities, better health, and improved safety. Today, the off-grid solar lighting products market is estimated to be an annual $200-250 million industry.

Off-grid solar is a fast changing and developing sector.  Ultimately what interests SIMA is the end customer and that they are served with a quality product to improve their lives. The hard work that our portfolio companies do on a day to day basis helps provide this access.

Despite impacts from Covid 19, the solar sector is resilient with improving scale and profitability.   Companies are becoming more efficient and focused upon asset quality.  Another trend is the sector is disaggregating from vertically integrated companies into more specialized businesses focused on one piece of the value chain (e.g. manufacturing, distributing, or financing).

Installation of Small Solar Panels on the Roof

Financial Inclusion – Microfinance

Microfinance has a 30-year history, reaches over 150 million people, and demonstrates that socially responsible institutions can produce financial and social returns. Even so, an estimated nearly 2.5 billion people, representing an enormous market, are without access to financial services.  The IFC’s SME Finance Forum estimates the credit gap for formal and informal micro- and SMEs worldwide to be upwards $3.2-3.9 trillion, of which $2.1-2.6 trillion is in emerging markets.

SIMA targets responsible microfinance and financial inclusion institutions that are expanding their product range and use financial technologies to increase scale, reduce costs, and improve social outcomes for customers.

Musoni Financial inclusion – Microfinance

SIMA is arranging the First Pakistan Microfinance Fund, which intends to lend to a portfolio of microfinance institutions with a focus on promoting financial inclusion for women and addressing youth unemployment.

SIMA’s Off-Grid Solar and Financial Access Fund includes established microfinance institutions which in addition to traditional business lines, increase energy access by offering finance for off-grid solar products for their customers.

Education

SIMA helped to develop the business model and establish Taleem Finance Company Ltd. (Pakistan).  TFCL is a new entity set up primarily to cater to the financial needs of middle and low-cost private schools and is the first of its kind in Pakistan. (Link to Taleem website)

The SIMA Impact Foundation offers the Local Impact Leaders Scholarship program, for scholars are from low-income communities in developing countries selected on a need and merit basis.  The scholarship provides resources, practical training, internships, and exposure so that scholars can become future local leaders in impact investing that understand and have lived, first-hand experience of the markets impact investing is trying to serve.  The program’s first four scholars are from Pakistan and have been selected through a cooperative arrangement with The Citizens Foundation.

The initial supporters of the Scholarship are Netri Foundation, the Geiss Family Foundation and Social Investment Managers and Advisors LLC.

Developing countries are more reliant on the private sector because of dysfunctional government institutions in most sectors. In particular, private schools are the hallmark of quality education in many of these countries.  We are seeing increasing growth in private education because the government has failed to deliver, especially targeting the low income population. We bring capital to grow these private sector schools.

Portable Solar Lighting System at Home - Happy Kids

Affordable Housing

Asaan Ghar Finance Limited (Pakistan) was founded and promoted by Social Investment Managers & Advisors, LLC.  Asaan Ghar is a housing finance company built on ethical double bottom-line principals that pursues both profit and social impact.  Its core principle is to empower low and middle-income people to own their dream home, build assets and improve their standard of livings.   Asaan Ghar is a customer- centric company that uses technology to automate the end-to-end customer onboarding process to provide an enhanced customer experience.  Asaan Ghar is a registered housing finance company with Securities and Exchange Commission of Pakistan (SECP).

 

Shelter is the most basic human need yet the majority of the world’s population live in sub-standard housing. Quality housing has direct effect on the health, wellbeing and security of families. Most developing countries do not offer affordable mortgage financing, especially for the low- and middle-income segment.  Asaan Ghar aims to provide affordable mortgage financing to to empower low and middle-income people to own their dream home, build assets and improve their standard of livings.

SDG - Sustainable Development Goals

Our target sectors impact many of the Sustainable Development Goals including:

Gender Equality
Quality Education
Affordable and Clean Energy
Good Health
Good Jobs and Economic-Growth
Innovation and Infrastructure