Skip to content
  • About
  • Partner with Us
  • Press Release Guidelines
  • Op-ed Guidelines
  • Indonesia
Primary Menu
  • Home
  • Latest
  • News
  • Brief
  • Interview
  • Opinion
  • Figure
  • Youth
  • SDGs
  • Topics
  • #LetterfromtheFounder
  • Brief
  • Featured

An Overview of India’s Impact-Investing Ecosystem

In November 2021, Yunus Social Business, an organization that focuses on supporting businesses from early to growth stage, published a report on India's current social business landscape. Get to know the current situation, roadblocks, and recommendations.
by Tia Hanifa February 10, 2022
mid close-up of four indian children smiling at the camera

Photo by Harsha Vardhan on Pexels

In a world where businesses are often associated with being driven only by profit, causing environmental destruction and inequality in its wake, it is hard to think that businesses can be a force for good. However, Muhammad Yunus, believes there is more.

Muhammad Yunus is the co-founder of Yunus Social Business and Nobel Peace Prize Laureate. He believes that the power of business could be utilized to end poverty and other human problems. From that belief, he proposed the model of a social business, “a company with a social or environmental mission at its core, where profit is a means to increase the social or environmental impact, rather than an end in itself.”

India is no stranger to the social business and entrepreneurship movement. In accordance, the impact-investing ecosystem has evolved; the total impact investments in India moved from micro-finance (30% of total investments, USD 1.5 billion between 2011 and 2017) to other sectors such as agriculture and water and sanitation (financial services, including MFI, contribution shrunk from 76% in 2010 to 43% in 2019).

In 2021, Yunus Social Business published a report on India’s current social business landscape, based on research that surveyed over 60 social businesses and other stakeholders in India. The report aims to shed light on the spectrum of financial and non-financial support available for social businesses, as well as uncover the barriers towards their growth and scale. 

The three main forms of financial support consist of grants, debt, and equity. Other than that, newer innovative fundings combine several mechanisms, such as revenue-based payment debt and quasi-equity, among others. 

Yunus Social Business Landscape Study
Source: Yunus Social Business’ Enterprise Support Landscape Study (India)

Debt, especially convertible debt, is often preferred for early-stage social businesses, since they lack sufficient credit and operational history. It also allows the founders to stay in control, unlike most traditional equity investments.

However, there are a number of barriers to founders seeking to access debt: the lack of collaterals and the long process that it takes to receive debt.

Many lenders also do not fully understand the social business model and cannot offer a relevant debt offering. Flexible and patient debt are hardly given out and structures are still growing to build up more risk appetite. 

As for raising equity, the biggest barrier is finding the right investor. Around 77% of the social businesses surveyed stated that finding an investor that offers feasible terms for equity financing and providing relevant growth support was a challenge.

Source: Yunus Social Business’ Enterprise Support Landscape Study (India)

Non-financial support is also essential to scaling social impact. Non-financial support can come in the forms of building entrepreneur capability, strengthening business fundamentals (advice regarding business strategy and financial sustainability), supporting governance and people management, impact measurement and management, and professional advisory.

Based on the report, access to networks and relevant support was deemed the most significant form of support. 

Unfortunately, the report also revealed several main gaps found in the ecosystem.

Firstly, the low awareness (and education) around financial instruments and fundraising. Most social businesses (79%) knew of the capital they required, but only 21% knew where to find it. For this issue, Yunus Social Business recommends the following:

  • Proactive development of investment readiness programs (IRPs) 
  • Making social business education affordable and accessible via pro-bono or low-bono platforms and/or resources

Secondly, the lack of inclusive lenses for financial and non-financial support delivery. While overall social businesses have a higher ratio of women in leadership positions, there is still much work needed to eradicate inequality in the system. Among these social businesses of the fraction that had raised external funding, only 24% were female-founded businesses. Only 33% of women stated they were confident pitching their business model to investors (compared to 56% male founders).

Other than that, most incubators and accelerators are based in the big cities (tier 1 and tier 2 cities). Social businesses in tier 3, 4, and rural areas often lack access to mainstream support services.

Yunus Social Business recommends to:

  • Integrate gender lens and approaches in acceleration and IRPs
  • Support local incubators that promote entrepreneur education in vernacular mediums
  • Leverage power of academic institutions in Tier 3 and 4 markets to train and promote local entrepreneurship

Third, there is the issue of limited pro-bono and low-bono non-financial support providers. To mitigate this, Yunus Social Business recommends to:

  • Establish Hybrid models through collaboration – make non-financial support more effective
  • Invest in unlocking mentorship networks

Lastly, there is low emphasis on impact measurement and management. The solution recommendations are as follows:

  • Build IMM focus from the get-go
  • Engage with social businesses on the topic of IMM so that they move from conceptual understanding to practical implementation

Editor: Nazalea Kusuma

Thank you for reading!
If you find this article insightful, subscribe to our Weekly Newsletter to stay up-to-date with sustainable development news and stories from multistakeholder communities in the Asia Pacific and beyond.
SUBSCRIBE NOW
Tia Hanifa
Website | + posts

Tia is a Contributing Author for Green Network Asia. She is a Client Executive at a global communications consulting company based in Jakarta.

  • Tia Hanifa
    https://greennetwork.asia/author/tiahanifa/
    Call a Spade a Spade: Why the Term "Revenge Porn" is Misleading
  • Tia Hanifa
    https://greennetwork.asia/author/tiahanifa/
    Intro to Digital Activism: Engage Responsibly
  • Tia Hanifa
    https://greennetwork.asia/author/tiahanifa/
    UN General Assembly Priorities for 2022: Vaccination and Reformation of the Global Financial System
  • Tia Hanifa
    https://greennetwork.asia/author/tiahanifa/
    Tiktok & "Green Influencers": Can They Make an Impact?

Continue Reading

Previous: B20 Indonesia for the Global Economy’s Collective Growth
Next: Singapore Wants to Tackle Greenwashing at Asset Management Level

Related Stories

a snow leopard cub eyeing its prey Snow Leopards Conservation Efforts in Central Asia
  • Featured
  • News

Snow Leopards Conservation Efforts in Central Asia

by Kresentia Madina March 20, 2023
a woman wearing a mask throwing an empty cup to a trash bin Urban Waste Management: How Your City Can Help You Recycle
  • Brief
  • Featured

Urban Waste Management: How Your City Can Help You Recycle

by Kresentia Madina and Nazalea Kusuma March 17, 2023
Dipterocarp trees in a forest in Kalimantan, Indonesia. Carbon Offset in Southeast Asia: Assessing Benefits and Opportunities
  • Brief
  • Featured

Carbon Offset in Southeast Asia: Assessing Benefits and Opportunities

by Lalita Fitrianti March 16, 2023
a band with four members are playing in front of audiences under orange-hued lights Decent Work and Rights Protection for Arts and Entertainment Workers
  • Featured
  • News

Decent Work and Rights Protection for Arts and Entertainment Workers

by Kresentia Madina March 15, 2023
an empty emergency tent Sindh Rehabilitation Project: Rebuilding Lives and Strengthening Disaster Response
  • Featured
  • News

Sindh Rehabilitation Project: Rebuilding Lives and Strengthening Disaster Response

by Kresentia Madina March 14, 2023
macro closeup of a black soldier fly looking at the camera Science & Technology for Sustainable Insect Farming
  • Featured
  • News

Science & Technology for Sustainable Insect Farming

by Nazalea Kusuma March 13, 2023
  • Latest
  • Popular
  • Partner
  • a snow leopard cub eyeing its prey Snow Leopards Conservation Efforts in Central Asia
    • Featured
    • News

    Snow Leopards Conservation Efforts in Central Asia

  • a woman wearing a mask throwing an empty cup to a trash bin Urban Waste Management: How Your City Can Help You Recycle
    • Brief
    • Featured

    Urban Waste Management: How Your City Can Help You Recycle

  • Dipterocarp trees in a forest in Kalimantan, Indonesia. Carbon Offset in Southeast Asia: Assessing Benefits and Opportunities
    • Brief
    • Featured

    Carbon Offset in Southeast Asia: Assessing Benefits and Opportunities

  • a band with four members are playing in front of audiences under orange-hued lights Decent Work and Rights Protection for Arts and Entertainment Workers
    • Featured
    • News

    Decent Work and Rights Protection for Arts and Entertainment Workers

  • an empty emergency tent Sindh Rehabilitation Project: Rebuilding Lives and Strengthening Disaster Response
    • Featured
    • News

    Sindh Rehabilitation Project: Rebuilding Lives and Strengthening Disaster Response

  • The green landscape of Semakau Island in Singapore Semakau Island, the Green Landfill in Singapore
    • Featured
    • News

    Semakau Island, the Green Landfill in Singapore

  • Indonesian spices as cultural heritage Enthusiasts Reclaim Spices’ Cultural Heritage, Launch Spice Hub Indonesia
    • Featured
    • News

    Enthusiasts Reclaim Spices’ Cultural Heritage, Launch Spice Hub Indonesia

  • illustration of National SDG tracker by Unescap UNESCAP Supports “Build Back Better” with the National SDG Tracker
    • Featured
    • News

    UNESCAP Supports “Build Back Better” with the National SDG Tracker

  • Beena Rao and Her Fight for Education for the Children of the Slums
    • Figure

    Beena Rao and Her Fight for Education for the Children of the Slums

  • Muslimat NU of Bojong-Tegal Campaigns Environmental Protection, Reduces Waste Production
    • Featured
    • News

    Muslimat NU of Bojong-Tegal Campaigns Environmental Protection, Reduces Waste Production

  • green big containers, blue building, and large tube at Hamparan project site B-Corp Certified Gree Energy’s Commitments for Food Industry Decarbonization
    • Featured
    • News
    • Partner

    B-Corp Certified Gree Energy’s Commitments for Food Industry Decarbonization

  • the TEPI Talks #4 event poster Media Engagement Workshop for Sustainable Grassroots Movements by Women’s Earth Alliance Indonesia
    • Featured
    • News
    • Partner

    Media Engagement Workshop for Sustainable Grassroots Movements by Women’s Earth Alliance Indonesia

  • Bali Grows Arms for Stronger Economic Recovery
    • Brief
    • Featured
    • Partner

    Bali Grows Arms for Stronger Economic Recovery

  • The illustration of Harm Reduction with the fundamental purpose of upholding the safety and dignity of all people. An Introduction to Harm Reduction
    • Brief
    • Featured
    • Partner

    An Introduction to Harm Reduction

  • A young adult from we day ugm and three elementary schoolers planting mangrove seed. Photo is taken from above and shows only their heads and backs. WE Day UGM 2022: Raising Awareness on Climate Change and Encouraging Community Empowerment
    • Featured
    • News
    • Partner

    WE Day UGM 2022: Raising Awareness on Climate Change and Encouraging Community Empowerment

About Us

  • About
  • The Team
  • Partner with Us
  • Sponsored Content
  • Contribute to Our Mission
  • Press Release Guidelines
  • Op-ed Guidelines
  • Advisory Network
  • Youth Advisory Network
  • Author Network
  • FAQ
  • Work with Us
  • Contact Us
  • Terms of Service
  • Privacy Policy
  • FAQ
  • Contact Us
  • Telegram
  • Etsy
  • Tokopedia
  • Media Link 11
  • Media Link 12
  • Media Link 13
  • Media Link 14
  • Media Link 15
© 2023 Green Network Asia