The state of play in impact investing: Trends, challenges, and opportunities.

At the AVPN Conference 2025, GIF’s Chief Investment Officer and Head of Growth, Avinash Mishra, spoke with APAC Network’s Oriel Morrison. They explored the challenges as government funding faces pressures, the opportunities for the private sector to play an increasing leading role, and how GIF Growth, GIF’s new blended finance vehicle, is mobilising public and private capital to invest in innovative solutions to development challenges in low- and middle-income countries. 

Here are the key interview takeaways:

Collaborative capital for the SDGs

Governments are under growing financial pressure, while the private sector is stepping up to play an outsized role in advancing the Sustainable Development Goals (SDGs). Achieving the trillions of dollars needed to meet these objectives will require all parts of the impact investing ecosystem to work creatively and collaboratively.

Innovative financing works

Blended finance using innovative financial instruments is one of the tools we have to help meet these goals, and where GIF has demonstrated impact over the last decade of investing. GIF Growth continues this approach by designing the right balance of risk and reward to attract private investors who otherwise may not invest in these markets. The goal is to make these investments feasible and appealing while generating evidence of their impact. 

Over the last decade, GIF has committed $150 million to nearly 80 innovations, helping to mobilise approximately $8 of additional funding for every dollar invested, totalling over $1 billion. 

Balancing social impact and financial returns

While financial returns are important, achieving them often requires patience in impact investing. We also need to acknowledge the reality of below-market returns in certain contexts and sectors, where social returns may be higher. For example, financial inclusion in India has different outcomes and returns than sanitation and water innovation in parts of Africa. 

Getting creative with blended finance

The strategic use of ODA from development partners such the FCDO and Sida, who are less concerned with financial returns, can unlock significantly more private capital. This blended finance approach plays a catalytic role, de-risking the downside for private investors, as well as potentially enhancing their returns. 

Innovating for scale needs more than capital investment

Scaling innovations requires more than capital alone.  GIF complements financing with technical assistance, active portfolio management, ESG guidance and fundraising support, which help build sustainability and attract follow on funding. Getting these fundamentals right can determine whether an innovation successfully scales.

Outlook for the future 

Impact investing is becoming increasingly mainstream, with growing interest from institutional investors such as pension funds and insurers. This trend is driving innovation in creative, blended financing across the sector. As more capital enters the sector, more innovative solutions will be developed, which in turn will attract further investment - a cycle in which impact remains central.

You can watch the full interview here.