Social impact investments reached $500 mn in 2015

It is expected to double to $1 bn by 2020

Social impact investments in India attracted $500 million in 2015 and are expected to double to $1 billion (about Rs 6,700 crore) by 2020, according to the Impact Investors Council (IIC). The term refers to investing with the implicit intention of generating positive social impact, along with a return on capital.

Impact Investors invest in social enterprises, which work to create social and environmental change. Such investment has been growing at a compounded annual rate of of 24 per cent since 2007.

A little over 50 impact investment funds have put in a cumulative $2.5 billion in 350-plus social enterprises, across a range of sectors, IIC chief executive officer Amit Bhatia told reporters. Excluding infrastructure, the $2.5 billion cumulative core investments are expected to grow to $6.5 billion by 2020.

Bhatia said Ronald Cohen, the G8 countries' chairman for impact investing, was on a visit to this country at IIC’s request, to further catalyse the sector. He has held discussions with Jayant Sinha, Union minister of state, finance, and is meeting business heads, impact investors and social entrepreneurs in Mumbai, Delhi and Bengaluru.

Currently, the $60 billion global market here is growing at 16 per cent yearly. The dominant focus at 61 per cent by value and 54 per cent by volume is seen on the financial inclusion sector.

Cohen says 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.