The Australian Government and the United Nations Development Programme (UNDP) are boosting support and encouraging investment in social enterprises in the Philippines through the creation of an innovative partnership for social impact investing.
With initial funding support of US$2 million (P100 million) from the Australian Government, the Innovation for Social Impact Fund Project will establish partnerships with financial institutions and leading social enterprise fund managers to help social enterprises in the Philippines further accelerate and expand their businesses.
Social enterprises (SEs) typically reinvest profits back into their businesses to meet specific social or environmental objectives, rather than only maximizing profit for shareholders and owners.
Successful SEs exist in the Philippines, but many face difficult challenges in moving beyond initial establishment and operation. Some of these challenges include insufficient domestic private capital and technical capacity to help SEs move to a stage where they can attract additional investment to scale up operations.
“The Project is designed to close gaps by providing selected, high-potential start-up SEs with funding and technical support to enable them to grow their operations and attract investments from global and local impact investors. It will support SEs that have a proven concept or ‘blueprint’ and a plan for growth with increased impact that is aligned with the Sustainable Development Goals (SDGs),” UNDP Philippines Country Director Titon Mitra said.
The SIF will assist up to 40 SEs over the next five years. A local bank will provide loans as financial assistance of up to US$150,000 (approximately P7.5 million) per SE over three years. Loans will have a repayment period of 5 to 6 years based on current business lending rates, with total SIF loan financing estimated at US$6 million (P300 million). In addition to funding support, international and Philippine experts will also provide technical assistance to help SEs to further develop their business models and expand operations.
“The Australian Government encourages the development of innovative social enterprises in the Philippines as a pathway to economic growth. This project is among the exciting aid investments Australia is supporting as part of our new approach to development cooperation. We are investing more in innovative programs that offer science & technology-based solutions to address some of the most pressing social and environmental issues, reach underserved communities and contribute to the SDGs,” Australian Embassy Deputy Head of Mission Mat Kimberley said.
The Social Impact Fund in the Philippines is aligned with and supports the broader initiative of UNDP to encourage increase in private investments to sustainable development and help achieve the SDGs. UNDP in the Asia Pacific, through its regional Social Impact Fund, has been engaging financial and social capital stakeholders to create or expand socially responsible businesses especially growing, small and medium-sized enterprises (SMEs).