"Generally, investors are motivated by the challenge that large proportions of individuals in emerging markets do not have access to even basic financial services, such as even a bank account," Mudaliar said.
In addition to microfinancing, projects include micro insurance and savings products, and effort to make financial services available to underserved populations, he said.
"This helps them improve their financial stability and moves them out of poverty," Mudaliar said.
The top themes of CDLFs, meanwhile, are employment generation, affordable housing and food security, according to the report. The report looked at 102 of these funds, a group holding $5.6 million in assets, and found that they are relatively small, and had a median of $25 million under management as of December 2016. Nearly all the funds target below-market-rate returns and raise capital through notes issued to investors, the report said.
"Microenterprise-focused funds have the highest provision for losses, while funds focused on housing and community facilities have the lowest," the report stated. Only 0.6 percent of CDLF loans were written off in 2016, according to the report.
GIIN officials said the report supports the argument that impact investing returns can be competitive with mainstream products.
"Interest and activity in impact investing has grown rapidly in recent years. This has been aided by the growing body of evidence on financial performance, which has shown that impact investments can generate returns that are competitive with conventional investing,” said Mudaliar. “This report shows that the same is true in the private debt asset class."