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Building Pathways Between Wall Street and the Global South — A Conversation with IIX

City road in Indonesia
City road in Indonesia by Afif Kusuma on Unsplash

Durreen Shahnaz is the Founder and CEO of Impact Investment Exchange (IIX), a Singapore-based impact firm that builds pathways to connect underserved communities through impact investing. Through USAID INVEST, IIX is working to source, review, and validate opportunities for blended finance in Indonesia. In this interview, Shahnaz discusses the challenges and opportunities for impact investing in Indonesia, and how her company strives to create more equitable financial systems for the world’s poorest and most vulnerable.

By Carol Chanik, INVEST Communications Advisor, and Vanessa Holsback Cardoni, INVEST

Impact Investment Exchange (IIX) is an impact investment firm with the mission of transforming financial systems so that women, the environment, and underserved communities are given value and a voice in the global market. “We build pathways to connect the Wall Streets of the world to underserved communities by measuring and unlocking investment capital,” says IIX Founder and CEO, Durreen Shahnaz. Based in Singapore, IIX’s work spans 53 countries and has unlocked $233 million of private sector capital to support more than 150 enterprises since the firm’s founding.

Through USAID’s Mission in Indonesia, INVEST partnered with IIX to provide expertise in sourcing, reviewing, and validating opportunities for blended finance solutions, and providing technical assistance and transaction advisory services to enterprises to increase the flow of investment capital in Indonesia. “IIX has been working in Indonesia for the past 12 years,” says Shahnaz. “We’ve gotten to know the markets and the SMEs well.”

IIX has a strong presence in the region, with an active database of more than 500 small-and medium-sized enterprises (SMEs) and 1,200 investors to help facilitate their work with USAID. In consultation with USAID and INVEST, IIX will select enterprises for targeted transaction advisory support services.

Looking at IIX’s success to date, INVEST sat down to talk with IIX’s Founder and CEO to discuss her background, the challenges and opportunities associated with impact investing in Indonesia, and how to distinguish true impact in a crowded market.

Durreen Shahnaz, Founder & CEO of IIX
Durreen Shahnaz, Founder & CEO of IIX. Photo Credit: Durreen Shahnaz via LinkedIn

The following interview has been edited down for length and clarity.

Carol Chanik: So, Durreen, tell us a little bit about yourself.

Durreen Shahnaz: Well, I’m the Founder and CEO of Impact Investment Exchange, or IIX. The vision of IIX began during my time growing up in Bangladesh — where I’m originally from — when I realized that development efforts have limitations. Coming from a war-torn country that was still getting itself back on its feet, I noticed the immense power and potential that good finance held. Healthy financial systems provide immense power that allow a country or economy to be able to participate in the global system.

So, it was very fitting for me that I ended up on Wall Street at Morgan Stanley some 30 plus years ago. I took the knowledge that I gained there and moved it on to the World Bank and later, Grameen Bank. It was amazing for me to see the power of finance and be able to connect the dots between development and finance. It inspired me. And really, since that point, I’ve been an intense entrepreneur. My goal is to connect the global south with the Wall Streets of the world.

Chanik: Can you talk about the work that IIX is doing with USAID and INVEST in Indonesia?

Durreen Shahnaz: IIX has been working in Indonesia for the past 12 years, so it’s very interesting for us to have the opportunity to work with USAID and INVEST on this project. According to a 2020 Global Impact Investing Network report, over the last decade in Indonesia, about $148 million [of total investment] came in from impact investing. And when I looked at the number I thought, this is very interesting because 10% of that is because of us [IIX]. We have unlocked close to $14 million and counting for SMEs in Indonesia. And we have been able to do this through our investment platforms. We target sectors which are very important in terms of sustainable growth and meeting the SDGs — agriculture, healthcare, waste management, clean energy — all of which is impacting over 2.4 million people in underserved communities.

So, this partnership with USAID and INVEST allowed us to go deeper with our ecosystem-building efforts. We have reached out to over 500 Indonesian enterprises across a multitude of sectors, many of which are operating and managing businesses in some of Indonesia’s poorest regions. We conducted a preliminary assessment, shortlisted relevant SMEs for the program — and all of this, of course, during the pandemic. We are excited that, through this activity, we will be able to unlock seven to 10 million dollars of new private sector capital, which is very much needed in these communities.

Chanik: Can you speak to some of the challenges and opportunities associated with private sector engagement and impact investing?

Shahnaz: There’s been a trend towards the impact investing space, which is brilliant. And we are glad to see that the U.S. government is taking this leadership in Indonesia, because the reality is that it’s just not about impact investing; it’s about the residual positive effects of this capital.

However, there is always risk associated with investment. For example, when you are investing in Indonesia, you actually have to invest in the local currency. Local currencies fluctuate and IIX takes on the role of hedging the risk of significant changes in the exchange rate. It’s our job to be able to structure [investments] and be the financiers and make the process easy for everyone.

Another challenge is around the efficacy of impact efforts. Even before COVID, Indonesia was becoming a hotspot for innovative finance and embracing “new ways” of doing business, and now even more so. But as more and more stakeholders come to the table, it becomes harder to differentiate between helpful and what’s “froth.”

We are seeing funding going into accelerators where businesses accelerate to nowhere. We see a lot of convening workshops around gender, but frankly nothing really happening beyond that. It can feel as if many efforts aimed at impact are not really translating into doing the important thing, which is unlocking new streams of capital. And that’s because it’s not that easy, right? We’ve been in this field for more than a decade and if you’re actually doing the work, you know it’s not that easy. It takes a lot of time and effort.

So, while our work has been successful so far, there is still progress to be made. The number of impact investment funding should be much higher [in Indonesia], and it can be if you create the right investment instruments using innovative finance to unlock private capital. To help unlock this potential and to do it more effectively in Indonesia, IIX is working to increase the number of experts with track records in innovative finance to facilitate larger deals that are suited for institutional investors.

On the bright side, the country is ready for investment. Indonesia is ripe. It’s one of the most exciting markets in the entirety of Asia. If you look at the statistics, the country has 290 million people, it’s one of the most populous countries of the world. There are over 17,000 islands with a huge amount of biodiversity. It’s the largest Muslim country in the world and also a country where you see women are playing a significant role. You have over 54% of the micro, small- and medium-sized enterprises that are started and run by women. So, Indonesia has a lot of the factors that actually make it very attractive to investors before they even put a dollar down.




INVEST, a USAID initiative, mobilizes private investment for development goals. It drives inclusive growth and sustainable development in emerging markets.

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INVEST, a USAID initiative, mobilizes private investment for development goals. It drives inclusive growth and sustainable development in emerging markets.

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