Impact Financing

Impact financing is a medium-long term loan granted for projects and activities that - in addition to an economic return - have the aim of generating a positive and measurable social impact.

Targets

Profit oriented companies that intentionally pursue a positive and measurable social objective. Standalone initiatives of public sector companies, (i.e. institutions owned, controlled or governed by the state, regions or municipalities) are not eligible for impact financing.
Among the main targeted sectors, we focus on activities and projects which act and deliver a social impact in the following sectors:

• Health and Wellbeing
• Welfare
• Social housing
• Training and Education
• Conservation and restoration of cultural and artistic heritage
• Social tourism
• Urban renewal of suburbs
• Services for including or reintegrating workers, disadvantaged and vulnerable people in the job market

Other sectors can also be addressed if producing a social impact as recognised by the local law or by programmes of supranational agencies incentivising social impact initiatives.

It consists of:

• Medium/long term loan with a discount on the interest rate
• Non-financial services in the form of training, visibility and networking
• Additional financial benefits towards the financed entities in the form - for example - of a donation or a partial interests refund with the purpose to further increase the social impact to the final beneficiaries.

Social dimension evaluation

When a deal is matching the above eligible sectors and clients’ targets, the following criteria for the social dimension evaluation are applied:
INTENTIONALITY – refers to an investment/initiative with the intention to generate positive social outcomes
ADDITIONALITY - the extent to which certain social outcomes happen because of the financed activity/project that would not have occurred in the absence of the intervention
MEASURABILITY – refers to the commitment of the financed party to measure and report the social performance and progress of underlying impact investments, ensuring transparency and accountability
FINANCIAL SUSTAINABILITY – refers to economically and financially sustainable initiatives/companies, meaning that the counterparty must be able to produce margins and cash flows deriving from its business/activity, sufficient to repay the debt.

For each impact financing deal, social performance indicators as well as reporting timeline and conditions are agreed, formalized and monitored.

For all further information, please contact your Banker/Relationship Manager or visit the nearest entrepreneur centre.