The Landscape of Impact Investing in South Asia: Pakistan

This paper develops an understanding of the impact investing market in Pakistan. It covers key supply-side themes such as the current status and trends in terms of the types of active investors, capital deployment, and opportunities for and challenges to investing. The paper also evaluates the demand for impact capital, challenges to accessing capital and opportunities for enterprise growth, and the vibrancy and scale of the supportive ecosystem necessary for the impact investment industry. It finds that Pakistan is a young country but has had a tumultuous political history with numerous regime changes including martial rule, dictatorships, and democracy that act as deterrents for impact investors. Other key findings include:

• Energy shortages, in addition to security concerns, remain one of the most significant challenges to investment;
• Pakistan has one of the largest impact investment landscapes in the region with an estimated deployment of USD 1.9 billion as impact funds;
• Development finance institutions (DFIs) play a prominent role in Pakistan and have deployed most of the capital to date;
• There are 18 active impact investors in Pakistan;
• Energy sector has received more impact capital from DFIs than any other sector;
• Microfinance sector has received large amounts of impact capital.