Mission Driven Finance's (MDF's) recent impact investment in Somali Family Service of San Diego (SFS) created a partnership between Islamic finance and impact investing.
According to Umar Moghul, who writes for Next Billion Financial Health, SFS is a nonprofit that supports the well-being of new Americans from East Africa.
SFS has recently been awarded a Community Development Block Grant from the City of San Diego. But SFS needed more funding to expand the reach of its much-needed programs. MDF is an impact investor that aims to "close financial gaps that will in turn close opportunity gaps," and SFS offered MDF an opportunity to do just that.
However, according to SFS, the investment would have to be structured in a manner consistent with the Islamic faith.
Moghul adds that both Islamic and impact investors should move towards "flexible debt, equity structures and asset-backed risk-sharing models in recognition of the irresponsible outcomes of typical debt and risk-shifting models."
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