India’s emergence as a dynamic hub for social enterprise and entrepreneurialism shows it is the best place in the world for impact investing, leading figures in business, government and philanthropy have said, as they gathered for the UK-India Week Social Impact Forum hosted by the British Asian Trust on 26 June 2019.
India’s emergence as a dynamic hub for social enterprise and entrepreneurialism shows it is the best place in the world for impact investing, leading figures in business, government and philanthropy have said, as they gathered for the UK-India Week Social Impact Forum hosted by the British Asian Trust (26 June).
The impact investing sector in India attracted over $5.2 billion between 2010 and 2016, with over $1.1 billion invested in 2016 alone.
India’s GDP also continues to grow, at a rate of 7.3 per cent in 2018/19, and it is classed as a middle-income country by the World Bank. The increasingly dynamic and innovative climate in the country is spreading to the development sector, with funding driven by Government, local CSR, a growing Indian philanthropy market and impact investment.
This entrepreneurialism, along with a good ecosystem for impact investment and the willingness of state and national governments to work with business and other third parties, makes India ripe for new ways of funding.
According to a newly published report on UK-India relations by the Foreign Affairs Select Committee, the Indian diaspora in the UK are a hugely important resource in developing personal and professional ties between the UK and India. Following on from evidence submitted by the British Asian Trust, the report urges the Foreign and Commonwealth Office to work more closely with the diaspora, promoting talent from the community into bespoke roles aimed at engaging Indian businesses and policy makers.
Abha Thorat-Shah, Executive Director (Social Finance) at British Asian Trust, said:
‘India has led the way in recognising the role private sector must play if we are to succeed in overcoming the challenges posed by the Sustainable Development Goals – across education, health, gender equality, climate change and employment.
‘It has pioneered innovative finance solutions for development, such as the $11m Quality Education Development Impact Bond to drive up literacy and numeracy standards in India, and we expect to see this continue across the country.
‘As India establishes itself as the global home for impact investing, new funders will emerge – increasing the overall pot of money in development. The potential of social finance outcome funding is huge: if just 1 per cent of global capital market investment was dedicated to it, we could fill the SDG funding gap.’
Last year the world’s largest education development impact bond (DIB) was launched in India, led by the British Asian Trust and a consortium of public and private sector partners. With funding invested into education NGOs, this DIB aims to improve literacy and numeracy skills for hundreds of thousands of children, drive a focus towards outcomes in the development sector and transform the way education is funded in India.
As part of their commitment to strengthening UK impact investment in India, British Asian Trust and India Inc, the organisers of UK-India week, will be hosting a social finance forum with diaspora involvement in India next year.
Dr Rajiv Kumar, Vice-Chairman of the National Institution for Transforming India (NITI Aayog), policy think tank of the Government of India, said:
‘We welcome the commitment from our partners in the UK to continue to drive impact investment in India. India is proud to be at the forefront of an entrepreneurial approach to philanthropy, through Development Impact Bonds and other innovative financing mechanisms to attract new private capital.
Once unleashed, we see the huge potential of this type of funding to tackle development challenges and improve the lives of successive generations.
We look forward to working with the development sector in the UK to take impact investment in India to a new level in the coming years.’