Invest. Catalyze. Mainstream. The Indian Impact Investing Story
This paper attempts to capture the growth and state of impact investing in India. It draws out some of the main influences around the sector's emergence and unique characteristics, the dominant approach to investing, and the key areas of focus for the sector going forward. Key findings focusing on the financial inclusion sector include:
- Around 70% of all investments were made in the financial inclusion (MFI and non-MFI) sector;
- Over 50% of all impact investments have been in the microfinance sector, with the top 15 MFIs accounting for 87% of all investments in the sector;
- Impact funds in India have been able to demonstrate an ability to leverage mainstream capital in their investee firms, with the microfinance sector seeing a leverage of 2X;
- Of the only 15 documented exits at a premium by impact investors, 10 have been made in MFIs;
- MFI sector has led the other sectors in terms of receiving multiple rounds of investments;
- MFI sector alone has been able to attract USD 225 million in follow-on capital involving only mainstream PE and VC investors in later rounds. This indicates the sector's ability to attract mainstream capital without the support of impact funds.