The loan is being offered through Oxfam's Small Enterprise Impact Investing Fund, which it has set up with Swiss microfinance specialist Symbiotics and the City of London Corporation.
The response to the news of the loan has been interesting and has prompted investment experts to take the growth of impact investing seriously. As more and more charities move into the commercial sector by funding social projects and businesses that can benefit wide sections of society in developing countries, they are highlighting this type of investment.
Impact investing is growing in popularity among regular investors who are looking to make healthy returns over the medium to long term, while doing their bit to help vulnerable communities or reduce climate change.
AAA advocates many types of alternative investment, but focuses its support on ethical projects like those backed by impact investing. "Helping people to work their way out of poverty and to create jobs and opportunities for large number of people within a community is an extremely productive use of an investor's wealth," claimed Anthony Johnson, AAA's analyst partner. AAA claims that a growing number of investors are now looking for ethical choices when deciding where to invest their cash, after being left with a bad taste in their mouths after the banking crisis.
Barbara Stocking of Oxfam told the Financial Times that it hoped its decision to invest in a socially responsible project will encourage other investors to do the same. "We are determined to prove to the investment industry that its scale and influence means it could play a significant role in eradicating poverty."
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