Impact investing involves putting money into businesses, projects or funds that generate financial returns alongside positive social or environmental outcomes. Unlike charity, the aim is for your money to grow while communities benefit.
According to Margaret Njeri, the most common areas attracting investment are renewable energy, agriculture, affordable housing, education, healthcare and financial technology.
“These are businesses solving real problems; that’s why they’re so attractive. They meet essential needs and still generate returns,” she says.
Margaret believes that investors now use frameworks such as ESG (Environmental, Social, Governance) metrics or position their projects with the United Nations’ Sustainable Development Goals.
“Measuring success could include things like the number of jobs created, carbon emissions reduced, or households gaining access to clean water or electricity,” she says.
She states that impact investments can be profitable, especially in fast-growing sectors like clean energy and fintech. However, some projects may offer lower returns but higher social value, so it depends on the investor’s balance between money and mission.
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“Fast-growing sectors like renewable energy, education technology, healthcare access, agribusiness, and fintech are delivering strong returns. These areas not only have high demand but also solve pressing community challenges,” she says.
According to Margaret, investors must define their priorities upfront. Some lean toward maximising financial returns with moderate social benefit, while others accept lower returns in exchange for transformative community change.
Ordinary people and not just wealthy investors can also participate in impact investing through chamas, Saccos, and crowdfunding platforms. For beginners, she advises starting small.
“You don’t need millions. You can invest through SACCOs, community savings groups, or crowdfunding platforms that support social enterprises. Even a few thousand shillings in a local agribusiness can count as impact investing.”
She advises diversifying across a few impact-driven sectors and tracking both returns and social outcomes. Over time, reinvest profits into projects that resonate with your values rather than chasing only social good without financial sustainability.
To attract impact investors, start a company or project with a business model with the potential for scale, community need, and a leadership team, and with both commercial viability and measurable social outcomes.
When you want to invest in an already existing impact-driven company, she suggests looking for transparency in how the company reports its impact, who benefits, and whether impact is embedded in their business model. Certifications, third-party audits, or alignment with SDGs are good signs.
Despite these challenges, the landscape is expanding rapidly. International funds are flowing into Africa, while local investors and governments are warming up to the idea of blending profit with purpose.
Common mistakes people make when starting include failing to do due diligence, chasing only the social feel-good factor without checking business viability, and ignoring the need to diversify.
Like any investment, impact investing comes with challenges. High upfront costs like renewable energy, political instability or sudden policy changes in African markets, companies exaggerating their social benefits, or lack of transparency are some of them.
“Millennials and Gen Z are asking that if their investments don’t solve climate change or inequality, what’s the point?” she says.
What’s more, global crises like climate shocks and widening inequality have made it urgent to support solutions that create lasting change.
Kenya has introduced incentives such as tax breaks for renewable energy projects and grants for social enterprises that impact investors can tap into. Though still limited, these policies show growing recognition that private capital has a critical role to play in development.
Meanwhile, new financial tools such as blended finance, social impact bonds, and pay-for-success contracts are emerging, allowing risks and rewards to be shared between investors, governments, and communities.