The advantage of this form of investment is that investors will be able to make a direct positive impact on the society. The investor’s money is used to improve the society and various problems that it faces like rural poverty, declining public health, providing affordable housing etc. The organizations that put the community investment capital to work are collectively known as Community Development Financial Institutions. (CDFIs). The minimum investment that is required is normally very low (approximately $1000 in the United States) with returns in the range of 0 to 5%. These institutions lend money to those places where local banks do not. The investments are made in only those places that have a great social impact at an affordable rate after due diligence is made on the capacity of the …show more content…
Are people who invest in SRI funds more socially responsible than the rest of the investors? If yes, do people who invest in SRI funds not invest in other non-ethical funds. Given that SRI funds are those that grant higher returns over a longer time frame are investors willing to risk their money for the cause of social responsibility? A majority of participants in the financial markets are those who earn the average basic pay in the industry. Their primary goal is wealth maximization and they would most likely be indifferent towards the nature of the fund. Even if these investors are socially responsible they would like to protect the capital invested. The SRI funds typically do not provide diversification benefits. In such a case a majority of participants would seek to invest in both a SRI fund and a non-ethical fund to protect his