Impact investing finds its place in India

Wednesday, September 13, 2017

Rising demand for socially responsible and purpose-driven finance has resulted in new ways of putting capital to work the world over. In the past decade, what is now known as “impact investing” has challenged the long-held view that social returns should be funded by philanthropy and financial returns should be funded by mainstream investors.

The global market for impact investments is projected to grow to $300 billion or more by 2020,1according to the Global Steering Group on Impact Investment. Although this is still a fraction of the total private-equity assets under management (about $2.5 trillion in 20162), mainstream investors have entered the arena and are bringing scale to what was earlier considered a niche. And the dialogue is shifting rapidly from impact investing to “investing for impact.”

India is fast becoming a test bed for many of these activities. Between 2010 and 2016, India attracted over 50 active impact investors, who poured in more than $5.2 billion. About $1.1 billion was invested in 2016 alone. This article, based on our new report, Impact investing: Purpose-driven finance finds its place in India, looks at recent developments in the country and debunks some myths that have long surrounded these investments.

Photo courtesy of Maria Andersson.

Source: McKinsey (link opens in a new window)

Impact Assessment, Investing
global development, impact investing