Social Enterprises: Bubble building within the space, creating fissures in the sector

Monday, July 29, 2013

When shoeshine boys start giving stock tips, then you know something is wrong, goes an old Wall Street dictum.

When this aphorism begins to resonate in the field of impact investing and social enterprises endeavouring to address some of the most intractable societal challenges of today, then it is indeed worrying. Last month, at the annual industry conclave of hedge funds in the US, Reuters reported that there was much talk about impact investing and philanthropy. This, coming from a $2.4 trillion industry category that epitomises greed and profiteering—even if it claims ’excesses of the past is past’— is a dire indicator of the frightening hype that pervades the space that social entrepreneurs now operate in.

It has ramifications for India as the country is still recovering from the microfinance bubble that burst, debilitating an entire industry that worked for the poor. India is believed to be a crucible for innovative social entrepreneurship and any sway of interlopers can be disastrous.

Source: The Economic Times (link opens in a new window)

impact investing, social enterprise