Opinion: Development funding is sidelining true impact investing

Despite the promise of impact investing to transform development, research suggests that it's often being co-opted by development groups, turning what was meant to be a financial tool into just another form of aid.

Impact investing, which originated in the 1990s from social movements in the United States and United Kingdom, gained significant attention during the 2007 Rockefeller Foundation Conference in Italy. It promised a "blended value" approach — combining social or environmental impact with financial returns.

Unlike development finance institutions, which typically invest in established companies, impact investors aim to support young entrepreneurs and startups in developing economies, promising a transformative shift in the development sector.