Kenya: state of impact investing

Impact investment momentum in Kenya is growing fast due to a young, enterprising and ambitious population, a number of social or environmental challenges which need investment, and rates of return which are attracting the attention of private impact investors.

This is particularly noticeable in relation to financial services, a sector in which Kenya has emerged as one of Africa’s financial services hubs.

Looking ahead, this momentum is unlikely to cease. This is due to positive trends in terms of the political, economic and in the business environment which render Kenya a hot-bed of private impact investment.

Economically, Kenya has seen GDP growth has averaged between 4 and 6 % annually since 2011, and there is little indication of decline: the World Bank estimates that the annual growth in 2019 will be 6.1%. This will be driven largely by population growth, urbanization and growth in private consumption through a rise in real incomes.

Recent government initiatives also support the impact investment movement. In 2018, the government of Kenya launched its Big 4 Agenda, outlining its four big priorities over the next five years: security and agricultural productivity, affordable housing, manufacturing, and universal health coverage.

Importantly, the government has publicly acknowledged the importance and significance of entrepreneurs and investors as key in achieving this agenda. Despite economic progress and support for impactful sectors, there is still an urgent need to provide basic goods and services to low-income households (86% of which lack these). This presents a huge opportunity for impactful and profitable businesses to include undeserved customers.

At ZAO, our first market entry is exactly Kenya with a number of running and coming soon projects in the agricultural sector.

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