Demystifying Impact Investment in Pakistan: An Exploratory Study on Perspectives and Motivations Driving Impact Investment in Social Startups

Abstract

Impact investing is a process of investing beyond financial gains. Investment in businesses or organizations that helps to generate positive social or environmental impact alongside financial gains is a practice of impact investing. This emerging approach is transformative to tackle the global development challenges. The research explores the motivations and perspectives of impact investors that shape their decisions of impact investment within Pakistan’s social startup ecosystem in various sectors. Despite the increasing scope of innovation specially within social entrepreneurship landscape of Pakistan, there has been limited research that identifies the socioemotional and non-financial motivations that may also influence the decisions of investors to practice impact investing instead. These factors may include family legacy, cultural alignment, and societal image. This research used a qualitative approach to interview industry professionals present within this field and impact investors who invested in Pakistani social startups. It provided insights into their experiences within similar context. The results show that innovation is a major force behind practice of impact investing by individuals, with some useful ramifications for encouraging socially conscious investments. This study provides valuable insights for social entrepreneurs that are looking for capital and legal support for their startups hoping to improve Pakistan's impact investing environment.