UNDERGRADUATE
THESIS
ABIGAIL RIBKA ROTUA
12417079
Financial Investment
Preferences of
Indonesian Millennials:
Are They Considering
Impact Investing?
"The idea behind impact investing is that investors
can pursue financial returns while also intentionally
addressing social and environmental challenges."
(Bugg-Levine and Emerson, 2011)
Background
The people who make impact investments are known as
Times are changing, and today's businesses are impact investors, and they aim to put their money into areas
becoming more engaged and socially conscious. such as:
Businesses and people are increasingly more focused on Affordable housing
Healthcare
sustainability to include strong social and environmental Education
impact, beyond just economic return. Renewable energy
Sustainable farming
The term "impact investing" has seen The main driver behind the rise of impact
tremendous growth and development investing is the demand from the next
over the past decade generation of investors known as "millennials"
According to Global Impact Investing Network (2018), impact
investing is investing with the intent not only to make money for
the investor but also to create a measurable benefit to society.
73% Millennials Investors
According to the Fidelity Charitable Impact Investing survey
It's important to note that impact investing refers to private funds. of affluent and high-net-worth people in 2018
These funds not only report on financial performance, but impact
investors are also trying to generate and quantify a positive
societal impact — for instance, number of schools built, measures 77% of affluent millennials have made
an impact investment
of economic activity in a low-income community, or reduction of Younger generations have a strong desire to integrate
carbon footprint by X units. giving back and making social change across their
personal and professional lives (Feldmann, 2014).
Background Research Objective
This research will focus on understanding
Indonesian Context the preferences of impact investing in
Indonesia, especially among Indonesian
millennials.
According to the Indonesian Central Bureau of
Statistics, it is projected that "The future of impact investing in To see the awareness of Indonesian
Indonesian millennials Indonesia lies with Indonesian millennials, millennials of impact investing, and to
to achieve a better Indonesia, socially and know whether they choose to do it or
(age 21- 36) environmentally"
will reach around not.
63.5 million people Furthermore, researcher aims to know the
reasons why Indonesian millennials choose
in 2020 (Utomo &Noormega, 2020) to do impact investing and also the barriers,
if any, that are holding back Indonesian
millennials from choosing impact investing.
Impact investing has a big To fill in the gap in existing studies, this
opportunity in Indonesia study focus on the Indonesian
millennials preferences, views, or
feelings about impact investing, but not
"Indonesia offers USD 23 billion in impact investing studying the actual behavior. The results
opportunities over the next 5 years." of this study do not reflect on how they
(Sanders, 2008) actually do it.
Research
Questions
Are Indonesian Millennials investors
considering impact investing?
What are the considerations of Indonesian
Millennials in doing financial investment?
Do they consider financial, social, and
environmental elements in making their
investment?
What are the motivations that drive Indonesian
Millennials investors to choose Impact
Investing?
What are the barriers, if any, that are holding
back Indonesian millennials investors from
choosing Impact investing?
Literature Review
The Impact Investing Millennials in Indonesia
1. What is Impact Investing? 3. The three dimensions of Indonesia Population and Indonesian Millennials’
Impact Investing and its Demography Characteristics
1. The distinction between Blended Value approach
Impact Investing and
Impact investors and their
Socially Responsible
motivations that drive impact
Investing investing
Methodology
Qualitative research method
Semi-structured interviews
Indonesian millennials, males
between 21-37 years old, located
in Jakarta, with business or
investing experiences
*Purposive Sampling* type of sampling
8 Indonesian Millennials
Findings (Contributions)
1 The research shows that it turns out that Indonesian
millennials have started to consider doing impact
investing which is reflected in their considerations
in making investments, namely including social and
environmental impacts as their considerations, in
addition to profit or financial returns.
Findings (Contributions)
The research indicates that there are two groups of motivations among
2 Indonesian millennials, namely intrinsic motivation and extrinsic
motivation.
Findings (Contributions)
The research also reveals that the factors that could motivate
3 Indonesian millennials to make impact investments could also be
barriers in Indonesia.
1) Lack of awareness of the importance of impact investing
2) Limited knowledge and understanding of impact investing
3) Mindset that is still cantered on profit or financial returns
4) Misconception of impact investing
5) Lack of Government involvement and regulations that
support impact investing
6) The financial situation of millennials in Indonesia
