One last look at 2013: Here are the top social entrepreneurship highlights that stood out in 2013
2013 saw the Indian social entrepreneurship scene continue to hot up as it remained the world’s go-to laboratory for social innovation. There also has been a build-up of capital that is waiting to be invested in the social enterprise sector. We took one final look at 2013 and came up with the events that defined the year. Highlights include CSR being made mandatory, the launch of the Indian Impact Investment Council and Infosys co-founder V Balakrishnan joining peer-to-peer lending company MicroGraam.
MicroGraam snags V Balakrishnan (Bala):
Bangalore-based peer-to-peer lending company MicroGraam pulled off a coup when they appointed Infosys co-founder Bala as their chairman. Bala recently quit the IT behemoth was a board member at Infosys. His global experience and knowledge in scaling projects will prove to be very useful to MicroGraam and its growth plans. MicroGraam founded by ex- Infosys head of banking and capital markets technology research group, Rangan Varadan and Sekhar Sarukkai, a serial tech entrepreneur sources funds from urban professionals and offers them as micro-loans to individuals in rural under-served communities, who typically have no access to financial services.
CSR becomes mandatory in India:
As part of the new Companies Bill Act, India became the first country in the world to make CSR (corporate social responsibility) mandatory for companies of a certain size. This is a bold move. While what activities constitute as CSR is still not very clear, what’s obvious is that there is going to be a lot of money that will get released into the social sector: more than Rs 10,000 crore according to a few estimations. But what’s going to be critical is the ability of the non-profit and social enterprise sectors to absorb the capital that will flow in and make the best of it.
DICCI fund becomes first to be recognized by SEBI:
The Rs 500 crore Dalit Indian Chamber of Commerce & Industry (DICCI) SME Fund became the first to be registered by SEBI as a social impact venture fund, which falls under Category I, Alternate Investment Fund. The fund, which will support Dalit entrepreneurs, was formally launched by finance minister, P Chidambaram in June last year. The initial contribution of Rs 10 crore was pumped in by Small Industries Development Bank of India (SIDBI). The fund is expected to raise the Rs 500 crore in the next 10 years. Next step for SEBI should be a separate stock exchange for social enterprises like UK’s social stock exchange and Singapore’s Impact Investment Exchange.
Indian Impact Investment Council launched:
IIIC was launched to make sure that the impact investing industry doesn’t end up making the same mistakes that were made in the micro-finance industry when it started to scale up. With about a billion dollars waiting to be invested in the Indian social enterprise industry it becomes tantamount that best practices and standards are set for this growing industry. The founding members who have pioneered the effort include Aavishkaar, Omidyar Network, Elevar Equity and Unilazer Ventures.
India launches first social impact bond:
Social impact bonds, which debuted in the UK, and spread really quickly globally to countries like the US and Australia, also made their way to India. Launched by Educate Girls, a Dasra portfolio organisation, it is a pay by results (PbR) program, targeted at education outcomes. The SIB is being support by Instiglio, a US-based non-profit social enterprise.
Mainstream corporate professionals continue to invest in impact funds or start one:
This year was when a lot of top corporate professionals either invested in social venture funds or started one. Hemendra Kothari of DSP BlackRock, Ravi Venkatesan, former chairman of Microsoft India, and Rajeev Bakshi, managing director of Metro Cash & Carry joined the roster of corporate investors in Unitus Seed Fund India (USF India) this year. After Ashish Dhawan, former head honcho of PE fund ChyrsCapital launched Central Square Foundation, to invest in education start-ups, last year, it was the turn of Krishnamurthy Vijayan, the former executive chairman of JP Morgan Asset Management India to launch – Charioteer Fund-I – a Rs 250-crore impact investment fund that will invest in India’s livelihood and skills development space.
Angel investing gets a boost:
One of the biggest gaps in the Indian impact investing space is that of angel funding, which provides the initial fillip that social enterprises need to grow the business, before they are ready for institutional funding. 2013 provided some good news in this aspect. Indian Angel Network carved out a social impact funding arm called IAN Impact consisting of 50 IAN members including Saurabh Srivastava (co-founder), Alok Mittal, Srikant Sastri, Ravi Krishnappa and Nagaraja Prakasam. The new arm focuses on making seed investments in social enterprises targeting those communities at the bottom of the pyramid (BoP). After investing in tech for social impact company GramVaani in July, IAN Impact invested in GoCoop Solutions and Services Pvt Ltd, a social marketplace in December. While there are plenty of individuals making angel investments into social enterprises, there are not too many organized angel networks that do impact investing, Intellecap Impact Investment Network is the other well-known angel investing platform.