When aid plummeted last year, the development landscape started looking everywhere for funds: Europe, Asia, the Gulf, philanthropies, and impact investing. But no individual donor or industry looked able to fill the gap left by the drastic cuts.

But this moment is an opportunity for impact investing to grow in the most efficient and impactful directions.

Elizabeth Boggs Davidsen, CEO of GSG Impact, highlighted Ghana’s Ci-Gaba Fund of Funds as a prime example of how regulatory reform and catalytic capital can unlock local capital. The initiative worked with the National Pensions Regulatory Authority in Ghana to adjust regulations, enabling local pension funds to allocate a percentage of their assets under management into alternative investments aimed at small and medium-sized enterprises.

“The idea is [that] there was definitely de-risking by some of the philanthropic capital to sort of enable that institutional pension capital to come in comfortably,” Davidsen explained.

Impact investing also offers a chance at a mindset shift from assuming that African markets require pure charity rather than market-based solutions.

Read the full article at Devex: The search for new money is reshaping impact investing