Exploring the Future of Impact Investment in Bangladesh: Insights and Challenges

The “Future of Impact Ecosystem in Bangladesh” moderator and panelists spoke on their experience on impact investing in today’s age. From left to right: Bijon Islam (Co-founder & CEO, LightCastle Partners), Erad Kawsar (Country Director, YGAP), Dr. Shaikh Shamsuddin Ahmed (Commissioner, Bangladesh Securities & Exchange Commission), Sharawwat Islam, CFA (Managing Director, Truvalu), Ahmed Yusuf (Advisory Lead, Bangladesh Angels Network)

The panel discussed the progress of impact investment in Bangladesh, with strong support from the government and relevant agencies. The discussion shed light on the potential of impact investment in Bangladesh and the need for clear policies, understanding, and measurement frameworks to encourage meaningful investments with positive social and environmental impact.

The discussion began with the moderator, Erad Kawsar, emphasizing the importance of impact investment in Bangladesh, where seeing actual results is crucial. The discussion focused on the potential and challenges of impact investment in Bangladesh.

One of the key takeaways from this discussion was that Bangladesh is fully ready to facilitate impact financing, having appropriate rules, regulations, and incentives in place. The country has established policies and regulations in the capital market to facilitate impact finance, including opportunities for debt securities and impact-related bonds.

The government emphasizes private sector involvement through various policies like the Mujib Climate Prosperity Plan (MCCP) and the National Action Plan (NAP). Startups in Bangladesh are seen as crucial in addressing critical issues such as financial inclusion, gender inclusion, climate problems, and access to technology.

As impact investing has been gaining significant momentum in recent times, certain thematic areas such as financial inclusion, gender inclusion, climate action, and access to technology can play an important role in impact investing.

Bijon Islam highlighted specific sectors, including food and agriculture, clean water systems, healthcare, and education, where entrepreneurs could focus to create impactful solutions.

Despite the potential of impact investing, Ahmed Yusuf also highlighted challenges faced by angel investors in adopting impact investment and the importance of capacity development and impact measurement frameworks. To avoid “impact washing” and ensure sustainable impact, measurement and reporting are crucial.

The panel stressed the need for matching investors with startups through matchmaking initiatives to connect impact startups with interested investors. There is a possibility of greater integration between venture capitalists and impact investors in the future.

To mitigate the risks of impact washing, Sharawwat Islam described a framework that combines SDGs (Sustainable Development Goals) and the IRIS framework (Impact Reporting and Investment Standards) to assess the impact of investments.

Proper impact measurement helps avoid “impact washing” and enhances transparency, thereby promoting trust among stakeholders.

Overall, the panel discussion provided valuable insights, emphasizing the importance of key criteria for investors to focus on startups with unique solutions to critical problems while ensuring the sustainability and scalability of their impact.

Transparency, honesty, proper accounting, and proactive communication were highlighted as vital attributes for startups seeking impact investment. In conclusion, impact investment was recognized as a powerful tool to drive positive change and foster sustainability within Bangladesh’s startup ecosystem.

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Watch the Full Video of the Discussion

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