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Impact Investing

Impact Investing Gains Muscle, Sees Enormous Opportunity In India

Impact Investing Gains Muscle, Sees Enormous Opportunity In India
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Impact Investors Council (IIC), the national association of impact venture capitalists (investors in social
enterprises) in India, recently said that 2015 impact investments crossed $500 million and are expected to hit $1-billion mark by 2020. The announcement was made by Sir Ronald Cohen, Chairman, G8 Impact Investing Committee, in Mumbai.

“Impact Investing is disrupting traditional philanthropy and has a revolutionary promise of becoming a $5 trillion global market, of which $1 trillion will be in India by 2050. With recognition and support from the Indian Government, India can hope to be a world leader in this sector,” said Cohen in a statement.

Impact investment has been growing at a CAGR of 24 percent in India since 2007, and over 50 impact investment funds in the country have invested a cumulative amount of $2.5 billion in more than 350 social enterprises, across a range of industries.

According to IIC, excluding Infrastructure, it is expected, the $2.5 billion cumulative core investments will grow to $6.5 billion by 2020. Currently, the $60 billion global market is growing at 16 per cent.

Emerging markets impact investment funds have returned 9.1 percent to investors against 4.8 percent for developed markets impact investment funds, said IIC in the statement. 

The national association in order to realize this high-growth potential in India submitted a representation to the government on behalf of the investors and social entrepreneurs, seeking recognition for the Rs 16,000-crore sector, and easier financing for social enterprises.

“Impact Investing with $1 billion annual investments in reach; is on the threshold of an enormous opportunity of unifying all Sources of Impact Capital (For-Profit, Philanthropic, CSR, Government, Retail) and unifying all Social Ventures (For-Profit Social Enterprises and Non-Profit NGOs/CSOs) to seize this $1 trillion opportunity by 2050, which can truly wipe every tear of every eye in our lifetimes!,” said Amit Bhatia, CEO, IIC.

This article first appeared in the Indian edition of Entrepreneur magazine (April 2016 Issue).

Edition: December 2016

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