A Sustainable Model
Combining impact investing and grants to generate social impact
At the Netri Foundation, we carry out a double social action:
- Social investments: We provide loans to organisations that generate social improvements in their environment.
- Grants: We support social projects that are economically non-sustainable.
The sustainable nature of the model is achieved by reinvesting the loans once they have matured and channelling the interest earned to finance the grants programme.
A Catalytic Model
Generating more financing for our collaborating entities
At the Netri Foundation we seek a Catalytic effect from our investments so that the institutions we support can obtain more financing than we can provide directly to them.
We do it in the following way:
- Guarantees: We extend guarantees to local banks in favour of our partner entities so that they can use these as collateral to receive loans in local currency, many times of a greater amount than that pledged by ourselves. Historically, for every dollar contributed in a guarantee, an additional investment of 1.8 dollars has been generated.
- Co-investment: We encourage the participation of other social investors by giving up part of our return in exchange for these investors obtaining a higher return, which justifies their entry into the project. For every dollar that has been contributed to a catalytic loan, an average of 4 dollars of additional investment has been generated.
Why Impact Investments?
Scaling Impact through market based approaches
We have realised that, although grants are vital to address many problems associated with poverty, they cannot address the full extent of the problem. Solutions based on the functioning of the market, such as investments in entities whose business models seek to solve critical social problems, represent powerful tools to fulfil our mission.
We conduct social investments in order to achieve:
- Social impact: We finance social enterprises, promoting their economic activity, to achieve a lasting, scalable, and sustainable social impact.
- Sustainability of the model: Once the loan has matured, we reinvest it in more social enterprises, and also, with the interest earned from the loans, we make grants to other projects.