The role of governance in enabling the pursuit of dual mission in bank-based impact investing

Richmond Odartey Lamptey and Michael Zisuh Ngoasong

Entrepreneurship & Regional Development, 2023, vol. 35, issue 3-4, 382-401

Abstract: Impact investing, defined as direct investments into small- and medium-sized enterprises (SMEs) with intentionality to realize social impact and financial returns, simultaneously, has emerged as an attractive, alternative source of entrepreneurial finance in marginalized communities. In this paper, we focus on bank-based impact funds (BBFs), where impact investors and commercial bank partner to create different vehicles of impact investments (managed funds, grants/guarantees or co-financing BBFs) for financing SMEs. Through the theoretical lens of governance, as applied to bank-SME financing and the pursuit of dual mission in social entrepreneurship studies, we develop qualitative case studies in Ghana, uncovering how BBFs enable the pursuit of dual mission by SMEs. The findings are drawn upon to develop a theoretical framework that depicts a unique form of governance as constituting the (i) alignment of the incentives of impact investors and banks to resolve structural and dual-mission tensions in bank-SME financing; and (ii) pre-approval, control and monitoring mechanism necessary for the pursue of the dual mission of financial returns and social impacts in bank-based impact investing. The findings have implications for fund managers, SMEs and policymakers seeking to attract impact investments for private sector-driven development.

Date: 2023
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/08985626.2022.2146758 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:entreg:v:35:y:2023:i:3-4:p:382-401

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/TEPN20

DOI: 10.1080/08985626.2022.2146758

Access Statistics for this article

Entrepreneurship & Regional Development is currently edited by Professor Alistair Anderson

More articles in Entrepreneurship & Regional Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().