The Editor's Post: Why impact finance should be wary of replicating colonial dynamics

Should we wake up to the risk of impact investing colonialism? In the face of aid cuts from Europe and North America, countries in the global south – from Latin America to Africa and Asia – are increasingly eager to “solve their own problems”, as Frank Aswani, CEO of the African Venture Philanthropy Alliance, puts it, notably by developing their own impact ecosystems.

And it’s working: one recent landmark was the final close of the Ci-Gaba fund of funds in Ghana, a US$75m social investment wholesaler where two-thirds of capital comes from local pension funds, showing that mobilising domestic capital for impact in developing countries is possible.

But one issue is that the norms, metrics and tools used in impact investing remain very much set by the global north – not least because that is where the overwhelming majority of impact investors are established: according to the GIIN’s latest market sizing research, investors in the global north manage 95% of impact investments globally, leaving 5% managed in the global south.

Naina Subberwal Batra, CEO of the Asian Venture Philanthropy Network, explained to me last year that this inevitably creates a power imbalance, and potentially a perception that North American or European investors are imposing their approaches without considering local sensitivities: an American foundation going to an Islamic country and talking about equity and freedom of speech hasn’t understood the local context, for example, she explained. “It is colonialism,” she added.

A recent research paper, looking at impact investing in Jordan, makes a similar point – and goes further, reports my colleague David Lyons. The paper, published by ecosystem builder Impact Jordan, argues that while the country’s impact investing ecosystem is growing, much of it doesn’t align enough with local values and instead tries to make international norms fit into the local context. 

This is not without consequences: if impact finance artificially imposes principles that don’t resonate with – or at times are opposed to – local cultures, communities won’t engage and the impact finance experiment will fail. The good news is that local approaches to impact investing in the Arab world already exist. Islamic finance, rooted in ethical investing and principles like philanthropic giving, is an obvious example of what impact investing should be working with in the region, says the report – rather than trying to impose, for example, an SDG framework that isn’t meaningful to communities. 

The impact finance movement will only become truly global if it accepts the cultural differences between regions and countries, and leaves agency to local actors to shape their own impact ecosystem. Trying to parachute pre-made requirements or concepts, especially where forms of impact finance already exist, is likely to be counterproductive.

This week's top stories:

Don’t replicate colonial power dynamics in impact finance, says Impact Jordan

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The Impact World this Week: 8 May 2026

Top image: view of Amman, Jordan, by Samenargentine on Flickr.