What, exactly, is impact investing — and how do you measure it? Impact investors, who invest for both social and financial returns, must strive for “positive net impact” by also accounting for the negative impacts of their investment when measuring its overall contribution, argues Toniic CEO Adam Bendell in the Financial Times. His remarks chime with the growing trend among industry leaders to call for more rigorous standards in measuring impact. Last month, the IFC announced its creation of nine principles designed to bring transparency and comparability to the market. EM private equity fund Actis, meanwhile, developed a measurement framework to assess improvements in key areas to find an “impact multiple,” enabling comparisons between projects in different sectors or locations. It’s all designed to counter the “baffling array of unverified, opaque and incompatible metrics” provided by the industry, to help impact investors make informed decisions.

Building investor trust should encourage greater inflows: With impact investing assets under management estimated at USD 502 bn held by over 1,340 organizations worldwide, there’s no question that money is available. But 76% of the investors surveyed by the Global Impact Investing Network (GIIN) in 2018 said that the sophistication (or lack thereof) of impact measurement practice was a significant challenge to investment. Egypt is seeing very little of the funding, with the MENA region as a whole holding only 4% of investment representation and general investor interest, according to the GIIN.

What can Egypt learn from this? Improved standards for social impact funds should lead to more effective impact investment by mainstream funds, OECD has said. While Egypt has a host of organizations, including angel investors, incubators, and the government, willing to provide initial capital and non-financial support to social enterprises and startups, the challenges of sustaining impact remain. Clear data about the quantitative impact of Egypt’s SMEs would attract more funding, as well as helping to build a more effective pipeline of initiatives to invest in, GSG argues in its Africa State of Impact Investing 2018 report. They also recommend leveraging some of the tools of the private equity/venture capital sector (such as a clear exit path), designing social impact bonds, and revising the policy framework.