NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, December 20, 2016

10 years, US$ 50 million, over 50 investments.

Those numbers don’t tell the whole story of Michael & Susan Dell Foundation’s journey in India. Since the foundation began its work in India in 2006, with the goal of eradicating urban poverty through its focus on education and family economic stability, it has focused on scalable solutions supported by a combination of grants and impact investments. Our impact investing evolution is reflected in both the organisations and projects that have scaled up as well as our learnings along the way.

As an impact investor, the foundation catalyses market shifts through pioneering investments, which bridge gaps that have not yet been addressed by the market for a low-income population. Our objective is to create positive impact through market-sustainable models.

We have learned many lessons in the last 10 years as an impact investor:
1.    Sector knowledge is critical: Pioneering institutions will be first in their space and are expected to break new ground. We need to support them as they pilot, pivot and scale. For instance, in 2006, we made our first impact investment in Ujjivan Financial Services. At that time, urban microfinance in India was considered a non-starter. However, the foundation combined our knowledge of the sector with on-the-ground surveys and pilots in urban slums, and was convinced that urban microfinance in India was as scalable as rural microfinance. Today, as Ujjivan reaches a client base of over 3.7 million, this experience shows us that it is crucial to stay close to the ground and understand the challenges in a sector. One way of achieving this is to focus on a specific sector.