Fragile and conflict impacted states often suffer from a severe lack of investment capital for private sector development. Diaspora investors have the potential to play a critical role as frontier investors, providing much needed capital for economic growth and development. This report explores a variety of investment mechanisms and public policies which might help facilitate this important form of investment.
Key Findings
- The large majority of diaspora investors are driven by a combination of profit motives and a desire to positively impact socioeconomic development. Investment opportunities targeted to the diaspora should therefore focus on those opportunities which provide both reasonable return and development impacts.
- Developing investment mechanisms which are diverse and flexible in investment term, amount, liquidity, and holding will be critical to capturing the entire spectrum of potential diaspora investment.
- Basic research on diaspora investor preferences and modest official efforts to engage with diaspora communities can have an outsized impact on diaspora investment inflows that can be leveraged for development.