The Promise of Impact Investing in India

Abstract

Governments around the world are starting to recognise the need for a new approach to social service delivery. One that places emphasis on identifying innovative ideas, testing their effectiveness and scaling up programs that prove successful. The main hurdles to this new approach are a lack of up-front funding, inability to sustain focus on performance and a reluctance to take on the risk of failure. The impact investment ecosystem is designed to overcome these challenges. With an active social enterprise space and an engaged investment market, impact investing takes advantage of private sector efficiency and capital to achieve public sector goals. With this report, we aim to provide an analysis of the impact investment sector in India and its potential to achieve social good. The study brings together wide-ranging analyses undertaken between February 2018 and April 2019. Structured around four key tenets of impact investment market activity — market trends in India, sector-level analysis, innovative financing and measurements— it takes the reader through the major trends that have shaped the Indian impact investment environment and offers specific recommendations. A special focus is placed on the key social themes of health, education and agriculture. The methodological approach put forth by the study will help identify the essential tenets for the development of this ecosystem, and layout clear, actionable recommendations for implementation by major stakeholders. Through undertaking an in-depth desk and literature review and a primary survey, the report aims to equip key stakeholders with the core conditions for decision-making across different facets of impact investment market activity. Armed with these learnings, readers will be poised to play a major part in the creation of a social financing ecosystem in India.