According to the Impact Investors Council, the biggest gap in impact investing in India is the lack of funding from domestic investors. The Council estimates that 80-85 percent of impact investments come from overseas. While a majority of Indian HNIs aren’t aware that social enterprises can deliver a triple bottomline—enjoy financial returns and create social impact—a handful of them are making a difference

Vikram Gandhi
After a two-decade-long career in investment banking—first with Morgan Stanley and then with Credit Suisse—Vikram Gandhi, 54, founded New Delhi-based Asha Impact in mid-2014, which comprises an impact investment arm, a non-profit trust, and an advisory on impact investing for business leaders. Over the last 15 months, the investment arm has funded eight social enterprises—which focus on affordable housing, education, financial inclusion and access to energy—with more than Rs 55 crore.

The capital comes from Gandhi’s personal wealth and from co-founder Pramod Bhasin, 64, the founder of Genpact, an NYSE-listed business process management company. “I have a simple philosophy: Does the company we are investing in target, either with their product or service, a market that is underserved and does not have access to that product or service? And are they doing it in a way that’s scalable and profitable?” explains Gandhi, who conducts MBA and executive education courses in impact investment at Harvard Business School, and shuttles between India (Mumbai and New Delhi), London, and the US.

Gandhi believes impact investing is not about sacrificing financial returns for social gain. “There is a prevalent view that you need to be doing charity or you need to be doing pure business and that there is nothing in the middle. That’s not true. One can be investing for commercial returns and be doing good and having an impact at the same time.”

He adds that the biggest issue plaguing impact investing in India is that the money going to social enterprises and impact funds is predominantly foreign capital. “I have been talking to a lot of Indian family offices, trying to educate them on this process, where their capital can generate risk-adjusted financial returns and at the same time help create markets, products and services for people who otherwise don’t have access to them. They can also add value by advising and mentoring social entrepreneurs whose companies they invest in. Isn’t that a perfect combination?”
— Anshul Dhamija

(This story appears in the 20 January, 2017 issue of Forbes India.)

 

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