Small Enterprise Impact Investment Fund (SEIIF) makes first investment, in Mongolia – October 8, 2012

The Small Enterprise Impact Investment Fund (SEIIF), a joint initiative of the City of London Corporation, Oxfam and asset manager Symbiotics, has made its first investment – in a leasing company in Mongolia.

According to a press release distributed by Symbiotics, “This unique impact investment fund has been designed to deliver to investors both measurable social as well as financial returns. It carries with it relatively low risk, by funding in small and medium enterprises (SMEs) through financial intermediaries serving communities within poor and developing countries. Since its inception in July this year, the City of London Corporation has invested $500,000 in the fund, with further investments from Oxfam, Symbiotics and private and institutional investors.

The first $1m loan by SEIIF has been granted to Xac Leasing, one of the leading machinery and equipment leasing companies in Mongolia and part of the Tenger Financial Group (TFG). Based in the capital Ulan Bator, Xac Leasing currently has 260 clients, almost exclusively SMEs and builds social and environmental reporting into its lease appraisal process. Access to finance for equipment is a vital first step for many small businesses, particularly those in the agricultural and food sectors. It is these small farms and businesses which are needed to produce a large proportion of the world’s food, and are the route out of poverty for many communities.”

According to Barbara Stocking, Chief Executive of Oxfam, “Our aim is to make impact investing a mainstream investment product which the sector recognises as a serious tool for both financial return and social impact.  In particular, SEIIF has been designed to meet the needs of the ‘missing middle’. These are the countless small businesses in developing countries which have the potential to thrive but are completely stifled by limited access to credit. The fact that we have been able to make such a significant investment within our first year proves that the appetite exists within the financial community, and we are continuing to bring new investors on board now.”

Mark Boleat, Policy Chairman of the City of London Corporation, notes: “This fund is an innovative model which enables private sector investors to make a measurable social impact at a comparatively low risk to their financial returns. The City of London is committed to driving forward an approach to investment which puts the concept of ‘service’ back at the heart of financial services – and the SEIIF is a key part of this strategy.”

To read Symbiotics’ press release about the SEIIF’s first investment, please click here.