Review of "Income Inequality, Record Bank Profits and the Citigroup Impact Investing Fund" by Minwoo Kim, Impact Investing Intern, American University.
These days, it seems that sustainable investing is a global trend. In this context, Citigroup seems to want to join the trend of the times through impact funding.
I think it is important to decide which business to invest in using criteria related to the positive impact on society such an investment may have. The question seems to be whether to place the selection and evaluation standards totally on the potential to succeed financially or on equality related factors such as status of the business owners as minority or women.
From a purely economic point of view, it would seem to be much better to put full importance on the potential to succeed financially. But we should also take the global trend toward consideration of equality and sustainable growth into account.
Though Citigroup plans to invest in minority and women-owned businesses, one concern is how can those business keep growing and move forward to the mid-long term. I think a good solution to this concern is to utilize a ‘business incubator’ approach that can systematically educate and support those women and minority-owned businesses.
This way, we can help them get through the well documented difficulties in the start-up stage and move on to the next growth stage, rather than just supplying short-term financing.
(Edited by William Michael Cunningham).