Around the world, impact investments is replacing charities to meet the basic needs in areas as diverse as childhood education, clean technology, and financial services for the poor. To keep up with the global pace, Nepal too has opened its doors for Impact Investment for a couple of years now. Deep diving into the term ‘Impact Investment’, they are investments made into companies, organizations, and funds with the intention to generate social and environmental impact alongside a financial return. With Nepal’s current economy meeting the criteria for impact investing, the market has been able to provide with ample investment opportunities.
I recently got a chance to sit down with Ton aan de Stegge, an impact investor from Netherlands representing Purplefield Investments which has invested over 600,000 Euros into the Nepali market. With the market full of risks, I asked Ton why he chose Nepal as a destination for him to make impact investments, he replied, ‘My entry to the Nepali market was a coincidence. I was introduced to Willem Grimminck who was trying to set up an investment practice in Nepal to help the local entrepreneurs. That was the pre phase of what later became One to Watch, an investment management firm that introduced Rockstart Impact to the Nepali entrepreneurial ecosystem. As for the impact investments, I am an investor in the Netherlands as well and have a lot of experience with many charities. I did not like how the charities caused an imbalance in the investor – investee relationship and did not create a structural improvement and independence- thus impact investing in real businesses.’
Purplefield’s checklist for making an investment includes entrepreneurial spirit, perseverance, an ambition to build a company and social commitment to helping families belonging to the bottom of the pyramid. With five Nepali companies through peer to peer investments and several indirect investments through Nepal Impact Investment Club, Ton does not intend on putting an end to his investments in Nepal. When asked about the challenges that he faces being a foreign investor in Nepal, Ton shares, ‘Most entrepreneurs that I have met are impatient just like me and Nepal with all its bureaucracy is testing that to the maximum. It is sometimes unbelievable that it takes so much time before we get an approval to transfer money into the country and the company we want to invest in. It took us a year to flow funds into Kalash Milk Industries and 9 months for Red Mud Coffee. We hope that the process will be less tedious in the days to come.’ In spite of the hardships that Purplefield has come across while investing in Nepal, Ton is enthusiastic since he found entrepreneurs who tick all the boxes for the idle companies to invest in and is dedicated towards a long term success for these companies.
With Rockstart Impact’s pipeline of ready to invest companies, Ton is looking forward to finding more companies to invest in through this network. ‘I always talk very passionately about my experiences from investing in Nepal to new people I meet. It is an enriching and rewarding experience for me and I would like to see as many other investors to experience the same feeling.’
Purplefield Investments in Nepal
One to Watch
Kalash Milk Industries
Red Mud Coffee
Published on The Himalayan Times, Perspectives.