The Kenya Social Investment Forum traces its origin to efforts by the Nairobi Stock Exchange to interest the non-profit and private sector to alternative instruments / mechanisms for raising funds from the Stock Exchange. In 2006 the Kenya Social Investment Forum (KSIF) was launched and various options for driving alternative instruments were proposed. The forum’s aim was to target development in various sectors that included financing key developments such as housing, education, water, social enterprises amongst others. Traditionally these are areas that are the preserve of the government. However, KSIF felt that financing social infrastructure using government funds alone was slow, costly and often inadequate to simultaneously address all the priority areas. On consensus an independent platform was agreed on this being the creation of the Kenya Social Investment Stock Exchange.

A business model has been developed that encompasses all the relevant parties and address all key issues of demand and supply. Key stakeholders will be incorporated into the model with relevant checks and balances in place.

KSIF has approached expert organizations in the various fields of expertise to work towards creating project screening tools while incorporating internationally accepted ‘best practice’ mechanisms towards grading each project against the pre-set criteria. Based on the grading outcomes, information memorandums for each of the projects screened will then be forwarded to the exchange for listing and appropriate fund matching this exercise will be conducted by the exchange. The fund members will have access to the graded projects listed and based on their funding criteria, they will work with the exchange to identify the most appropriate projects to fund. This will therefore ensure maximum return on investment for both social and financial return. As the exchange is a self regulatory organization it shall be governed by its members through the appointment of directors to the exchange from both the fund intermediaries and fund members. This will be done while taking into account the various regulatory statute currently in place in Kenya.

Financial intermediaries and fund members will be required to make annual contributions of $10,000 towards the exchange to meet the operational costs of the exchange. Organizations that are listed will be required to contribute $1,000 and a percentage of funds received as a result of listing on the exchange. Incorporated within the exchange will be a hedge fund that will be used to mitigate currency risk. Hard currency funds will be injected into the hedge fund earning interest rates of between 4 - 5% p.a. and will be lent out to projects at about 7 – 12% in local currency. To capitalize this fund an initial injection of $ 5 million will be required. The fund will be managed by an appointed manager.

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