A new report by The Fred Hollows Foundation and Social Finance UK has found eye health and ending avoidable blindness to be an ideal target for impact investors looking for measurable social benefits as well as a financial return.
The Power of Impact Investment to Improve Vision report provides new ideas about how eye health can be financed through private capital and outlines a number of opportunities for impact investors in the sector.
This report suggests that a combination of the ease of treatment, cost-effectiveness, social impact and prospect of financial return means treatments for cataracts, uncorrected refractive error and trachoma are the most suitable interventions for early-stage impact investments in eye health. With over 10 million people in developing countries estimated to be blind due to cataracts, the potential social and economic impact of turning this around is huge.
“Impact investing is profit with purpose. It’s about extending finance to entrepreneurs and enterprises you wouldn’t normally extend it to with the intention of targeting a social outcome while generating a financial return,” said Brian Doolan, CEO of The Fred Hollows Foundation.
There are several features of eye care service provision that are well suited to impact investment: there are clearly measurable and attributable social outcomes, and there can be real prospects for financial return. In cataracts, for instance, about 300 social enterprise hospitals already exist that have proven that it is possible to provide free surgeries to the poorest of the poor while also remaining financially solvent through the user fees of other patients.
The report proposes several investment options that respond to these limitations. These include concessionary loans to scale the social enterprise cataract hospital model; seed funding for social franchises that provide spectacles; and investing in treatments for blinding trachoma.
The report also explores how a development impact bond could turn preventive health programs, such as diabetes prevention in the Pacific, into investible opportunities – leveraging the fact that external development assistance forms an integral part of Pacific health budgets.
The Fred Hollows Foundation is currently working on the creation of a development impact bond to address cataract blindness in Africa, with work being led by Dr Lachlan McDonald, the Foundation’s senior health economist.