MUMBAI, India – Social venture capital is the phrase of the 21st century and that phrase is spreading to India. Both Stanford University and Duke Univeristy have named India’s Aavishkaar as one of the world’s top impact investors. As the nation’s oldest and largest social venture firm, Aavishkaar is also the first Indian firm to be recognized for its social entrepreneurship and investment in rural development projects.
Stanford’s Graduate School of Business will use Aavishkaar as a primary case study in its curriculum, focusing on its success in private equity and venture capital. In its study on best practices in impact investing, Duke University has included Aavishkaar as a chief example. Also included in the study are Pacific Community Ventures and Deutsche Bank. “The inclusion of Aavishkaar demonstrates the growth of social venture capital as an alternative source of funding for enterprises in India,” said The Economic Times.
Vineet Rai, Aavishkaar’s Managing Director, reiterates the firm’s focus on investing in development enterprises. “We only invest in entrepreneurs who seem to have the capability to build institutions, have a genuine desire to work in rural India, and are accepting of the challenges that come with it,” Rai said in an interview with The Economic Times. “We basically ask the question, ‘What are you trying to do?’”
Aavishkaar has a strong history of investing in enterprises that are commercially viable, socially relevant, with a rural focus and a promise to multiply “bottom line returns,” according the firm’s home website. Their investment portfolio covers a wide span of development areas, including technology for development, handicrafts, renewable energy, agriculture, rural innovations, health and education.
The company’s various investees have a sharp focus in local and rural development. One example is Zameen, a company that focuses on restoring India’s farmland and securing autonomy within farming communities. Zameen works with marginalized farming communities to improve efficiency and lower costs, as well as raise incomes by making certification accessible and affordable. As primary shareholders in the company, farmers play a significant role in developing the policies and practices.
Another of Aavishkaar’s investees is Vaatsalya, a healthcare provider that offers affordable medical care through a group of rural and semi-urban hospitals. The Vaatsalya network currently includes 10 hospitals, but aims to expand to 50 hospitals over the next three years according to Aavishkaar’s website.
Aavishkaar also invests a large amount in micro-financial institutions (MFIs). One such institution, Grameen Koota, provides small loans to women that help them develop sustainable skills – such as trading, agriculture and animal husbandry – and generate their own incomes. Grameen Koota serves nearly half a million members and was ranked number 19 by Forbes Magazine in the Top 50 MFIs world ranking (in 2007).
Stanford and Duke University are not the only ones to recognize Aavishkaar’s success. In 2006, the firm won the World Business Award as one of the best for-profit business models working towards achieving the United Nation’s Millennium Development Goals. Jed Emerson cited the firm as “an example of an innovative development solution” in a paper for the World Economic Forum in 2006. Furthermore, Aavishkaar is a recipient of a grant from the Ford Foundation to analyze the connection between small- and medium-sized enterprise (SME) development and poverty alleviation.
For more information on Aavishkaar, their investees and their impact in India, please visit http://www.aavishkaar.in/
– Mallory Thayer