NB Financial Health

Wednesday
September 28
2016

James Militzer

‘A Sweet Spot for Impact Investing’: Omidyar Network’s Roopa Kudva discusses India’s Growing Prominence

There was a surprising amount of tension on SOCAP’s “Investing in India: A Unique Impact Landscape” panel, much of it revolving around a simple question: Are these investments making a difference? As Global Innovation Fund’s Raymond Guthrie put it, “Just because you’re doing it, doesn’t mean it’s actually helping.” Noting that there’s been well over a billion dollars going into impact investing funds in India, he asked, “So where’s the impact?”

Roopa Kudva, a partner at Omidyar Network and managing director of Omidyar Network India Advisors, sat on the panel, and afterward we asked for her take on the question.

“I have a very different view,” she said. While acknowledging the challenges of impact measurement, she emphasized that, “If you just look at our investees and their target customers and the target populations that they serve, there is visible evidence on the ground that the dollars that are getting in are making a difference to their life trajectory, their quality of life, their earning capability, and their access to basic goods and services.”

Along with this growing impact, she cited the sector’s broadening focus as a cause for optimism. “The initial years saw the bulk of the money going into microfinance. That, however, is rapidly changing, and we’re seeing money going into newer areas, like education, financial services, creating job opportunities, access to transportation, agriculture – there’s a whole new range of investment opportunities that have opened up for impact investors.”

In describing this landscape, Kudva sounded downright bullish: “India’s time for impact investing has never been better than it is today. On the one hand, we’re seeing an ecosystem for entrepreneurs which has never been as conducive as it is today, whether it be in terms of the funding available, the quality of talent, or government support. And on the other hand, you have the drivers of social impact, which are gathering greater momentum. You have more people with access to a mobile phone, you have a rapidly increased number of bank accounts in the country, a new skilling policy. So the combination of the two … is creating a sweet spot for impact investing in India today.”

One remaining challenge in the country, according to some on the panel, is finding investable entrepreneurs. But even there, she sees promise. “I think the situation was much more difficult 10 years ago, and five years ago even, where because of the inherent risk aversion of the Indian middle class, you didn’t have people becoming entrepreneurs. It was always the brightest and the best students went and got a job in IT, or IT-enabled services, which was the booming sector in India at that point in time. But in line with global trends, that has rapidly changed.”

She cited the Indian Institute of Technology, one of the country’s top engineering schools, where last year, 10 percent of the graduating class – about 1,600 students – went into startups. “That reflects a shift on the supply side – we are seeing some of the best minds moving into entrepreneurship, and I think that’s a phenomenal trend for the country.” Even so, she said, while India continues churning out good entrepreneurs, it can still be hard for them to find available talent. “While you have good engineers, you don’t have specialists in product management, marketing and sales – and certainly the moment you go outside the major cities of Mumbai, Gurgaon and Bangalore, then quality talent for startups becomes very hard to find.”

In the wide-ranging interview below, recorded at the SOCAP16 conference, Kudva shares some highlights of Omidyar’s work in India, discusses the impact of the government’s Jan Dhan Yojana financial inclusion drive, and describes how investors can work with the unique characteristics of the Indian market to help businesses scale up.

 

 

James Militzer is the senior editor of NextBillion.

 


 

 

 

Categories
Entrepreneurship, Investing
Tags
impact investing, investment fund, investors, social business, social enterprise, social entrepreneur, social entrepreneurship, social impact, video