$4 billion planned for investment in social enterprise in 2012: Report
Thursday, September 13, 2012
According to a global impact investment market study by JP Morgan, and the Global Impact Investment Network (GIIN), investors see the social enterprise as a market ’in its infancy and growing’ with almost $ 4 billion planned for investment in 2012. Over the last eight years $ 600 million has been invested in social enterprises in India itself. The Monitor Institute estimates that over the next 5 – 10 years impact investments will grow to 1 percent of global assets under management, emerging as a new asset class.
This development extends to India where impact investing is noted as a key trend in a recent GIZ (Deutsche Gesellschaft fur Internationale Zusammenarbeit), the German development agency’s study on the trends for responsible finance and challenges in the country conducted by Ernst and Young. For this study Social enterprises are defined as for-profit entities, committed to social impact as part of their mission with a focus on delivering products and services in critical-needs sectors to consumers at the base of the pyramid.
“By running activities like awareness campaigns and capacity building workshops, we want to encourage the integration of environment, social and governance criteria into investment decision making,” says Stefanie Bauer, Advisor on Sustainable Economic Development, India, GIZ. To facilitate the social enterprise environment GIZ will set up a new Euro 3 million Indo-German bilateral program starting in 2013 to promote SMEs with a social impact.
They will not give out grants but will use this money through the program to help SMEs with technical assistance spread over three core areas. It will go into responsible banking, responsible investments and ecosystem development for SMEs in India including social businesses. GIZ’s intent is to increase competitiveness of micro small and medium enterprises.