Impact Investing for Nutrition

Why impact investing for nutrition?

Finance can be used to drive better inputs, production, aggregation, trading, processing, and marketing of healthier foods in low- and middle-income countries (LMIC). Many of the local enterprises delivering foods with potential to affect nutrition outcomes in low-income households operate in difficult markets with weak financial systems, poor infrastructure, and low consumer education. These enterprises often face tensions between driving their financial profitability and envisaged impact as they scale. Most of these companies need a combination of working capital financing and a longer-term investment in productive assets (such as equipment for processing or fortifying foods) to increase production and improve efficiency. 

To help enable more nutritious food supplies by agri-food SMEs, the overarching goal of this project is to unlock impact investments for SMEs so they can produce healthier foods and help improve nutrition in Sub-Saharan Africa. The project aims to unlock a supply of relevant financing which will in turn stimulate the production of more affordable, safe, and nutritious foods, making them accessible to at-risk populations by encouraging greater impact investments in nutrition.

Research Objectives

This work builds on the previous stages of this project, which outlined how the Access to Nutrition initiative (ATNi) can positively impact nutrition outcomes:

To increase the availability of finance for nutrition-sensitive SMEs (by building the business case and metrics for nutrition).
To encourage SMEs to adopt more nutrition-sensitive practices (by adoption of an SME tool or other nutrition-related tools).

Methodology

To address these key problems, there are three interconnected components that build the business case:

Nutrition-sensitive investing approach
Development of a Nutrition Impact Investing Framework
Provision of technical support to SMEs

Nutrition-sensitive investing approach

ATNi, in partnership with iGravity, are creating an Impact-Linked Finance Fund (ILFF) to improve nutrition outcomes in East Africa. The ILFF provides finance to high-impact enterprises and directly rewards these for positive outcomes generated through their activities. Ultimately, it should attract more funding for impact investors focused on nutrition outcomes.

Nutrition Impact Investing Framework (NIIF)

The NIIF is establishing a set of standards to guide nutrition-sensitive investments.

The framework will include recommended indicators informed by good practice metrics from the impact investing space. The goal is to create a simple, measurable framework that does not place an undue reporting burden on SMEs while helping development finance institutions, donors, impact investors and fund managers allocate additional impact investments to nutrition and measurement of these outcomes.

Nutrition Finance Business Monitoring (NFBM)

In the final phase of this project, after a consensus has been achieved on the NIIF and reporting metrics, ATNi will launch the Nutrition Finance Business Monitoring (NFBM) tool, which will help to create an investment pipeline.

Timeline

The timeline for this project is projected for 2024 – 2025.

Contact Information

For more information linked to the project, please reach out to:

Marina Plyta, Partnerships Manager: marina.plyta@atni.org

Impact Investing for Nutrition (II4N)

Project Overview

Methodology