Social Finance unveils two India-focused impact funds worth $2b

Photo: Reuters

Global impact investment firm Social Finance on Monday announced the launch of two India-focused funds of $1 billion each in a bid to drive social change across sectors including education, social infrastructure, and affordable housing.

The two funds will be housed under Social Finance India, which was officially launched on Monday in New Delhi by Ronald Cohen, chairman of the Global Steering Group for Impact Investment, and also co-founder and director of Social Finance UK, Social Finance USA, Social Finance Israel. 

The Indian entity will be headed by Govind Sankaranarayanan, who held leadership positions at the Tata Group for over two decades, and until very recently was the COO of Tata Capital, Social Finance said in a statement. 

Social Finance India’s first fund, called India Education Outcomes Fund (IEOF), with a corpus of $1 billion will focus on improving quality of education in India, including learning outcomes and numeracy for children in grades 1-3, studying in government and affordable private primary schools. The fund will also focus on technology aided interventions to improve learning in subjects such as mathematics for children in classes 6-10, besides improving completion rate of girls till class 10 in government and affordable private schools.

The second fund, India Impact Fund (IIF), will catalyse debt for impact in housing, health and education, and help bridge the large funding gaps in meeting the UN Sustainable Development goals (UN SDG). The first fund within the umbrella IIFF, will target equity funding for small lenders in the priority sectors including, agriculture, MSME, education, housing, social infrastructure, and renewable energy.

Subsequent funds under the IIFF umbrella will be designed to support Indian government’s national priority programmes including, Make in India, Skill India, Swachh Bharat, Pradhan Mantri Jan Dhan Yojana, and Digital India.

“India is ground zero for meeting the challenges of the UN SDG goals and Social Finance India will catalyse different types of innovative financial instruments and financial intermediaries to help bridge funding gaps across a range of sectors. An important part of this effort will be the sharpening of our focus on outcomes and improving the sophistication of impact measurement,” Sankaranarayanan said. 

The board of Social Finance India includes several financial sector veterans including Rajiv Lall, founder MD & CEO of IDFC Bank; Ashish Dhawan, founder of PE firm Chrysalis Capital and Ashoka University; and Vikram Gandhi, former vice-chairman, Credit Suisse and senior lecturer at the Harvard Business School. Yuri Afanasiev, chief representative of the United Nations in India, has joined as a member of the advisory board.

Charitable organisation Tata Trusts and impact investment firm Omidyar Network have backed Social Finance India, according to the statement.

Social Finance India, is a part of not-for-profit organisation Social Finance, which has mobilised 500 million pounds since inception in 2007. The firm has sister organisations in the US and Israel and a network of partners across the world.