written by BorsadelCredito.it
Despite or perhaps also because of the pandemic, sustainability is at the top of all governments’ agendas. Especially in Europe, where the Green Deal aims at transforming it into the first zero-emission Continent. The environmental issue, however, is just one side of sustainability. Circular economy is another important element, as it intends to reduce waste but also to produce a positive impact on society.
Investors’ interest in all things sustainable is increasing and many of them are choosing to invest in ESG (Environmental, Social and Governance) funds. The offer of ESG funds is based, on the one hand, on the exclusion of companies that produce tobacco, weapons, and pornography, and on the other, on the active engagement of investors, in order to influence sustainable behaviours in companies.
FROM MICROFINANCE TO MARKETPLACE LENDING
One way to enable sustainable economy is undoubtedly to create an impact-investing portfolio. The global impact-investing market is estimated to be worth $ 715 billion (2020 survey by the Global Impact Investing Network). The lion’s share – in Italy and abroad – is microfinance, which accounts for two thirds of the total amount.
Now, the most advanced versions of microfinance are undoubtedly direct lending and marketplace lending. The concept at the base of these is financing the real economy with small amounts, helping micro-enterprises that wouldn’t find funds in any other way, since the loans they need are too small to be interesting for banks, and they have no access to alternative means such as minibonds and microbonds, or the stock exchange.
INVESTORS’ INTEREST AND THE ITALIAN OPPORTUNITY
We can measure the impact of marketplace lending on the real economy by looking at the numbers of financed companies and how much they have been financed. But we can also measure it through non-financial parameters: an economy like the Italian one, 95% of which consists of micro and small businesses, can grow thanks to marketplace lending. And now that institutional investors are looking with increased interest at marketplace lending, small companies will have more and more space to grow.
