Impact Investment in Latin America and the Caribbean

The Inter-American Development Bank (IDB) often finds itself at the forefront of development initiatives in the region of Latin America and the Caribbean (LAC). This has been its experience with microfinance, syndicated loans, technical assistance and other successful projects. With this in mind, the next step for the IDB is to deepen its involvement in impact investments. The impact investment industry is growing fast and growing everywhere. It builds communities, conserves the environment, develops economies and—as an extra incentive—it yields returns. The IDB has the potential to fill the many gaps and roles that remain in the impact investing sphere; it has the potential to champion the industry throughout the hemisphere.

The final report explores the opportunities, challenges and trends of impact investments in LAC, through the scope of the IDB’s mission and vision for the region and its people. The report findings are based primarily on interviews with 25 impact investors. While the team believes their opinions are fairly representative of the space, they are not the 25 largest players and as such the findings might be subject to a degree of size bias. Note that many of the investors were not prepared to address all the questions put to them. Consequently, in some cases our response analysis captures a smaller number of answers. Also, it is important to note right at the start of this report that the impact investing industry is still in its infancy. Differences of opinion and definition are a challenge to both industry progress and indeed the writing of any report like this. Impact investing, as a concept, is used in this report in accordance with the definition provided by our sample of surveyed investors.

The research and interviews with professionals, funds, organizations and networks that are already active and experienced in this industry produced a series of recommendations, delineated into four distinct themes: strategic positioning, financial support, marketplace development and sector-specific opportunities.