AFC and LIIN pioneer new wave of impact investing in Sri Lanka

Alliance Finance Company PLC (AFC), a leading financial institution in the Non-Banking Financial Institutions (NBFI) sector, has partnered with the National Advisory Board for Impact Investing in Sri Lanka (NABIISL). NABIISL operates under the umbrella of the Lanka Impact Investing Network (LIIN), an organisation dedicated to fostering economic growth in the country. This alliance aims to find and support small and medium- sized enterprises (SMEs) through equity investments via the Social Enterprise Fund (SEF). This represents a significant advancement in Sri Lanka’s impact investing ecosystem, offering SMEs access to private equity. The coalition solidified this commitment by signing an MoU recently, marking a notable milestone in the impact investment industry in Sri Lanka.

AFC stands at the forefront of Sri Lanka’s financial sector, pioneering a triplebottom- line approach that integrates financial, social and environmental considerations. As a Non-Bank Financial Institution, AFC has aligned its financial goals with Environmental, Social, and Governance (ESG) criteria through our Sustainability Standards a n d C e r t i f i c a t i o n Initiative (SSCI). Every business operation of AFC is strictly adhered to the standards set by the SSCI, which had been formulated by the European Organisation for Sustainable Development (EOSD), a European Union (EU) Initiative. The EOSD and the International Council for Sustainability Standards ensure that its holistic sustainability- certified institutions adhere strictly to its certification criteria, setting a benchmark for responsible financial practices both locally and globally. AFC is the first financial institution in South Asia and one of four pioneering financial institutions in the world to receive SSCI Certification in 2019. SSCI is the world’s first measurable and certifiable holistic sustainability standard for value-driven financial institutions. AFC’s purpose statement of “Make the world a better place through sustainable finance” along with its high impact goals, are directed at creating value for financial, social and environmental well-being. These goals are currently well aligned at AFC to contribute to 12 of the 17 United Nations Sustainable Development Goals (SDGs) as well as several National Development Agenda goals, emphasising a holistic approach to sustainable development using finance as an important catalyst. AFC said 76% of its portfolio is dedicated to investments that elevate the 12 UN SDGs, reflecting AFC’s commitment to making a positive impact through its operations.

By depositing with AFC, clients are actively participating in a unique impact creating initiative aiding the sustainable development of the country with a special emphasis on rural economy outside the Western Province. The investments are channelled towards projects that generate significant social and environmental benefits in addition to financial returns making sure that nobody is left behind. The integration of ESG principles into AFC’s operations and investments is paving the way to a sustainable future and serves as a model for the broader industry, while mitigating risks, fostering positive social and environmental outcomes and enhancing long-term investment returns. LIIN is a pioneering and well recognised impact investment firm in Sri Lanka that is committed to directing private capital towards addressing pressing social and environmental issues in the country. This collective effort with AFC is in line with LIIN’s mission, emphasising its dedication to building a more active impact investing ecosystem in Sri Lanka. LIIN and Social Enterprise Lanka, with AFC as one of the investors, introduced a pioneering television program named ‘Ath Pavura’. This initiative empowered many social entrepreneurs in Sri Lanka by offering them a national platform to exhibit their businesses and attract investments from local impact investors. A l l i a n c e F i n a n c e C o m p a n y ( A F C ) embarked on its Social Entrepreneurship development journey in 2018 by partnering with ‘Ath Pavura’, Sri Lanka’s inaugural TV reality show for social enterprises. The initiative aimed to empower social entrepreneurs by offering essential financial capital and fostering market opportunities to expand their enterprises.

Over the course of two seasons, AFC made investments in six emerging social ventures that showed remarkable potential for scalability and expansion. The establishment of NABIISL, in partnership with the Global Steering Group for Impact Investing (GSG), has significantly strengthened Sri Lanka’s position as a hub for responsible investments. GSG’s presence in the country has opened opportunities for sustainable development and inclusive growth, making it an attractive destination for investors. NABIISL’s primary objective is to facilitate the growth of Impact Enterprises in Sri Lanka by offering financial aid through the Social Enterprise Funding platform. SEF was established in 2018 in collaboration with the Capital Alliance Group and the United Nations Development Program (UNDP), with the explicit aim of supplying capital to Impact Enterprises, enabling them to generate significant social and environmental impact. This partnership is a significant advancement in enhancing the impact investing arena in Sri Lanka.

This will aid the country in accomplishing the nation’s sustainable development goals and enable both local and foreign investors to participate through responsible investments. LIIN and National Advisory Board Impact Investing Sri Lanka Founder and Chairman Chandula Abeywickrema contended and articulated this as key initiative to revolutionise the entrepreneur ecosystem in Sri Lanka, by creating access to private equity and the responsible debt to emerging and growing SME sectors that are supported by the banking and Finance Sector. He also recognised the fact AFC’s conviction and commitment was greatly demonstrated through their partnership engagement with Ath Pavura and now with NABII Sri Lanka, particularly with AFC Deputy Chair man/Managing Direct or Romani De Silva joining the NABII Sri Lanka board.