Alumni Impact Story: Durreen Shahnaz

Like many of today’s Wharton students, getting into social impact finance “was not an epiphany” for Durreen Shahnaz, WG’95—it was something very much a part of her life’s journey.

The 1995 Wharton graduate was born and raised in Bangladesh, a country “where women do not receive much opportunity to pursue a career in finance, let alone anything else,” Shahnaz says. She counts herself as among “the fortunate few” who attended a U.S. college. After receiving a bachelor’s degree in government and economics from Smith College, Shahnaz served a stint on Wall Street as a financial analyst at Morgan Stanley. She was told she was the first Bangladeshi woman to work in Wall Street.

It was “quite an eye-opener,” she says. While she was able to experience the “powerful role” that finance and the capital markets played in growing the world economy, that growth was “very myopic—it was just about maximizing capital at any cost.”

“For me, it became a lifelong quest to use the knowledge of finance to do good for the world and bring about sustainable development to the disadvantaged people across the globe,” Shahnaz says.

In 1991, she returned to Bangladesh and worked at Grameen Bank. The organization received a Nobel Peace Prize in 2006 for providing microloans to the rural poor. Her experience with it proved transformative for Shahnaz, who returned to the U.S. in 1992 to work on a joint master’s degree: an MBA from the Wharton School and a master’s from the School for Advanced International Studies at Johns Hopkins University.

But Shahnaz’s special knack is for social entrepreneurship. She has formed unique companies such as OneNest, an online global wholesale marketplace for handmade goods from around the world; Impact Investment Exchange (IIX), the world’s first stock exchange for social enterprises; and Impact Investment Shujog (Shujog), a not-for-profit focused on deepening the impact of social enterprises in their community and the knowledge base around creating social capital markets.

She first explored the notion of creating a stock exchange for Asian and African social enterprises while teaching social innovation and social finance at the Lee Kuan Yew School of Public Policy at the National University of Singapore. She believed such an exchange would democratize the entire capital markets system, eliminating many of the barriers to market entry that currently exist while achieving social and environmental goals. More investors could use such a stock exchange to create social and environmental good. Social enterprises need such funding. Those with access to funding are seeing their growth capital needs outpace the capacity of investors in the private markets, Shahnaz says.

Started with support from Rockefeller Foundation, IIX operates three capital-raising platforms: Impact Incubator, Impact Partners and Impact Exchange. The platforms showcase social enterprises seeking growth capital from a global audience of impact investors, giving the social enterprises greater opportunities to scale and expand their positive impact.

Through Impact Incubator (launched 2012) and Impact Partners (launched 2011), IIX has facilitated almost $10 million of impact investments in Asian IEs from its network of several hundred accredited impact investors as well as eight deals for social enterprises. IIX has screened more than 300 Asian social enterprises to be included on these platforms, of which it has listed a total of 30.

In June 2013, IIX launched the world’s first social stock exchange: Impact Exchange.

Impact Exchange will unlock large amounts of capital for impact investing in Asia and Africa by allowing retail and institutional investors to make impact investments. Impact Exchange is operated by the Stock Exchange of Mauritius (SEM), in cooperation with IIX, and regulated by the Financial Service Commission Mauritius. The first IIX issuance should occur within the next few months of this publication, Shahnaz says.

“Impact Exchange provides all the advantages of other public trading platforms—liquidity, transparency and efficiency—while also ensuring that the social and environmental mission and impact of the issuers is safeguarded and showcased,” she says.

This profile was originally published on on Jan. 30, 2014, as part of the full-length feature “Banking on Good Returns,” featuring the stories of six Wharton alumni taking strides in social impact finance. For the full story by author Katie Kuehner-Hebert, pick up the Winter 2014 issue of Wharton Magazine, or read the rest of the profiles online.