Indian Regulations Stifling for Social Investing

Monday, August 24, 2009

Harold Rosen founded the Grassroots Business Initiative (GBI) of the World Bank’s International Finance Corporation in 2004. In 2008, GBI spun off into the non-profit Grassroots Business Fund, which, among other things, looks at funding socially relevant projects in India. Rosen spoke to Atul Sethi about the potential of social enterprise funding in India:

What makes you want to invest in India?

India’s world-class, cost-effective skilled labour force cannot be denied, and it can easily help bring business to the bottom of the economic pyramid. India has a large pool of social investors and entrepreneurs who have started to look at rural and underserved markets as systems-integrated business groups. Due to its scale, India can be viewed as an incubator for developing and testing business models through institutions and world-class business groups to drive social development. Once tested, these models can then be exported to other countries facing similar challenges. India’s legal and regulatory regime complicates foreign investment dealings with organisations such as ours. Indian government has the same regulations for social and mainstream investors, many of which serve important functions in mainstream investing, but can be stifling for social investing. Social investing is in its nascent stages in India, and like every industry we expect some chaos as the industry moves from the invention phase to the growth phase.

Is there a model of social enterprise funding that India can adopt from other countries?

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Source: Times of India (link opens in a new window)