The intermediator ecosystem for impact investing in Zambia still does not have many players. The capital market of Zambia is not as deep as the Big Four in Africa (Egypt, South Africa, Nigeria and Kenya). As a result business find it hard to get advice locally in relation to Impact investment.
There are only few Zambian intermediaries with experience in raising impact capital, including 4IP/IPA, and those that exist have limited deal experience. So businesses have limited opportunity for using advisors towards raising impact capital in Zambia.
The local intermediaries operating investment funds face the same challenge as the business namely that they find it challenging to raise capital themselves.
Benchmarking the intermediators operating in Zambia to the UK shows a clear gab, both in terms of certain segments simply not existing, which our companies 4IP & IPA (4IP Group Zambia) is seeking to fill out.
Challenges to Intermediaries of Impact Capital such as 4IP Group.
Despite multiple number of transactions happening in the country over the years, intermediaries
face challenges while facilitating impact investments:
- Lack of investment ready companies
- Zambia does not have a mature venture capital industry like South-Africa or Kenya to create the base for deal sourcing.
- Companies lack understanding of impact,
• how to measure impact,
• how to incorporate impact to business strategy - Businesses are not attractive to investors due to
• prevailing macroeconomic conditions,
• difficulties in scaling business,
• low export capacities/foreign exchange risk
• lack of clear exit mechanisms due to illiquid and inactive capital markets. - Lack of regulatory framework and poor financial and governance structures.
