Impact Asia – The X Factor

- View from the bottom of the pyramid

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World engine in a state of flux..? Or is Chaos a ladder?

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UNCTAD estimates annual funding gap of $2.5 trillion to achieve the SDGs by 2030

The Challenge

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“It is imperative to implement innovations that can divert private capital towards development objectives to help bridge the SDG financing gap.”

- Dr. Shamshad Akhtar United Nations Under-Secretary-General and Executive Secretary of ESCAP

Some Key Challenges

1. Negative Trend: Foreign direct investment (FDI)

reducing YoY [FDI accounts for 39% of incoming finance

for developing countries]

2. Scalability: Sustainable business models and finance

schemes often fail to reach the scale needed to shift the

world economy

3. Rising debt burdens: This is especially emerging as a

cause for concern in regions like Africa

4. Blurred lines: The roles played by key stakeholders

have become blurred, along with interdependence and

new means of collaboration

Impact Investing is a fast growing and new approach to economic development

Rising Opportunity

Fully oriented to positive impact

PHILANTHROPHY THEMATIC INVESTING

SUSTAINABLE INVESTING (ESG)

SOCIALLY RESPONSIBLE INVESTING (SRI)

MAINSTREAM INVESTING

Positive screeningInvestment in chosen sectors

Negative screening No consideration of impact

Fields for Impact Investing

Projected GROWTH

World Economic Forum expects an investment of $500 billion by 2020 in impact businesses

Financial Majors Going ALL IN

Impact is now mainstream. It is an asset class in its own right. Financial majors-Blackrock, Bain, BNP, Goldman, Zurich Insurance, AXA are now investing in impact.

Evolving and ENABLING

LANDSCAPE for investment in

India

$5.2 Bn invested in India in the

last 6 years; $10 Bn projected for

2025

Regulation for Social Venture Capital Funds

within AIF; Crowd funding

white paper

Priority Sector Guidelines provide

additional opportunity for

growth- JAM

Enabling regulation on

2% mandatory CSR

contribution

Shift in the way we do

BUSINESS

Focus on triple bottom line, adoption of the SDGs, geo-political complexities, ubiquitous (and new age) technology and entry of millennials

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The Rising demand for socially responsible and purpose-driven

finance has resulted in new ways of putting capital to work the world

over

ImpactXThe Impact Multiplier

X1 – Blends and provides a unique

texture to mainstream funds + Launch of new funds

X2 – Enables scaling of social

enterprises

X3 – Application roadmap for

catalysing the SDGs

X4 – Provides exponential growth

opportunities for women entrepreneurs

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Unique texture to mainstream funds + Launch of new funds

X1

1. World Bank Launches SDG-Linked Bonds in Asia - These five-

year bonds, the first of their kind in Asia, have raised US$3.52

million

2. ESG Funds - Avendus India ESG Fund (claimed to be India’s first ESG

Fund) plans to raise USD 1 Billion from HNIs, family offices and

offshore investors

3. Danish SDG Investment Fund - Supports the UN Sustainable

Development Goals through commercial investments in developing

countries [six pension funds and IFU signed an agreement to establish the

Danish SDG Investment Fund]

4. The Water Finance Facility (WFF) - Mobilizes large-scale private

investment by issuing local currency bonds in the capital market in

support of their own country’s national priority actions on water

and sanitation service delivery

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IPO Released

Affordable Healthcare (2015)Revenue: $247 Mn | Profits: $3 Mn

IPO: $94 Mn | Over-subscribed: 8.6x

Financial Inclusion (2016)Revenue: $158 Mn | Profits: $27 Mn

IPO: $136 Mn | Over-subscribed: 40x

Financial Inclusion (2018)Revenue: $641 Mn | Profits: $165 Mn

IPO: $664 Mn | Over-subscribed: 14.6x

Enables scaling of social enterprisesX2

How has Impact Investing enabled

scaling of social enterprises?

Increasing awareness in the concept

of impact investing

Philanthropists looking to be more

strategic with investments

A growing entrepreneurship

ecosystem focusing on social

problems (Social Enterprises)

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Acting as a catalyzer to the SDGsX3

Impact investing in turn has led to the creation of innovative financial instruments which in turn shall bolster the financing of the SDGs

Green Bonds/Blue Bonds

Social Impact Bonds (SIBs)

Pandemic Bonds

Pandemic Bonds

Diaspora Bonds

Social Success Note

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Growth opportunities for womenX4

Women’s empowerment looks to be one of the transformative economic trends of our time.

A wealth of research shows how investing in women around the world produces powerful results that benefit families, communities and entire societies – and on top of all makes for good ROI.

Gender lens centered philanthropy, foundations and endowments

Angel investors focused on women-led startups

Investment firms that pursues above market returns through investing in women

Microfinance institutions empowering women in developing countries

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There is no shortage of capital to finance the SDGs. However, mobilizing it requires a

systematic change in the way equity markets are organized

Bridging the financing gap requires developing an SDG financing architecture and

creating an SDG bond market – Catering to green, blue and social bonds amongst others

Although the private sector’s contribution to SDG financing can be substantial it is not a

substitute but rather complimentary to public financing – Public Goods, not Bankable

Projects

Frontier technologies open possibilities for financial innovation to mobilize capital

towards the SDGs, including risk-assessment and investment returns, such as in the case

of Artificial intelligence, blockchain, the internet of things, and cloud computing .

Private Sector PerspectivePush for Impact Investing

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Creating a ‘capital with a conscience’ ecosystemOur Vision

GRAMEEN CAPITAL INDIA( GCI )

GRAMEEN CAPITAL INVESTMENT ADVISORS

GRAMEEN IMPACT INVESTMENTS INDIA

SOCIAL STOCK EXCHANGE / CROWD FUNDING

PLATFORMEQUITY FUND

Advisory Practice NBFC/ Debt financing

“The fact is that there is plenty of money in any country to lend money to the poor. It is all a question of mobilizing it and making it available to the

poor. Grameen Capital India will facilitate access to local capital markets for Indian MFIs.”

Prof. Yunus, 2006 Nobel Laureate,

in “Creating a World Without Poverty”

Grameen Impact Investments India (GIII) serves as a debt vehicle for social enterprises

Grameen Capital India (GCI)

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• GCI began operations in 2007; catalyzed over $200M of funding in microfinance

• GII registered Non- Banking Finance Company (NBFC) under the Central Bank

• Offers multiple sources of diverse debt including senior and venture debt,

structured finance and debt syndication / advisory

• Focused on the double-bottom-line; invests only in social enterprises

• Founding Member of Impact Investors Council – over $5Billion invested in

impact in India

SUSTAINABLE AGRICULTURE

CLEAN ENERGY

AFFORDABLE EDUCATION

FINANCIAL INCLUSION

AFFORDABLE HEALTHCARE

GIII focuses on investments in high impact enterprises in 5 sectors

GOAL (Grameen Outcome Accelerated Lending) SDG Impact Bond Series

About: GIII’s GOAL SDG Impact Bond Series is an innovative financial

instrument/product for Social Enterprises/NGOs to catalyze additional private capital for their

initiatives, incentivize them for impact, and reduce their cost of debt financing

General Structure:

(GIII)Outcome Funders

Social Enterprise/NGOs

Auditor

Working Capital

Tracks Performance Reports Outcomes

Working Capital + Impact/Interest Payments

Credit Enhancer

1. GIII provides upfront working capital loan to a Social Enterprise (SE)/NGO to implement their impact initiatives

2. An independent evaluator is hired who tracks the performance of the SE/NGO on a monthly /quarterly basis to quantify the impact and showcase progress of the initiative

3. GIII and the SE/NGO then take the initiative to the market to the Outcome Funders (CSR/ Foundations/Endowments etc.) to fund the impact being created and further scale these initiatives

4. The funds raise through outcome funders are used by i) SE to repay the interest to GIII, and ii) by NGO to repay both the principal + interest to GIII

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GOAL Series – WHEEL SDG#5 Impact Bond

Project: Women Holistic Enhancement & Empowerment Livelihood (WHEEL) SDG#5 Impact Bond with

Child Fund India under GOAL Series

About: WHEEL SDG#5 (Gender Equality) Impact Bond is working towards helping the most marginalized

tribal women in Maharashtra & Madhya Pradesh to become self-reliant and empowered by training them

to become poultry farmers (micro-entrepreneurs), and have an average annual income of INR 30,000

through 30 months intervention

Metrics:

Outcomes:

o 2000 women entrepreneurs trained and facilitated to become active Poultry Farmers

o 2000 women entrepreneurs will have an average annual income of 30,000

SDGs Targeted:

Structure:

Quantum Impact Interest Tenure Geography

INR 7.5 Cr 14% 30 months Maharashtra & MP

Impact Investing & Innovation Looking Ahead

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R

TTechnology as scale-enabler

Authenticityand

Measurement

Results-based Financing

Total Ecosystem

A

T

UUniversality of inclusion

T.A.R.T.U.The X-Factor

• Mobile and

Internet

platforms

• Big Data

• AI-ML

• Start-ups

• Block-chain;

Distributed

Ledgers

• Impact

Measuring

Tools

• Focus on

triple-bottom

-line

• New Asset

Class

• Blended

finance

• Policies

• Stakeholders

• “No one left

behind”

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