The ninth webinar in the SKI Touchpoint series, conducted by the Capital for Impact Practice Area, delved into the topic of ‘Social Stock Exchange as a Catalyst in the Impact Ecosystem: What Lies Ahead?’. The session, facilitated and moderated by Lekhya Reddy, Engagement Manager and Lead of the Capital for Impact Practice Area, in collaboration with Hemant Gupta, Head of SSE BSE, offered a comprehensive exploration of the potential of Social Stock Exchanges (SSE) in India, and an insight into how it is being evolved to strengthen it further as we move forward. The webinar covered the following questions:
- How can SSE in India significantly enhance efficiency within the impact ecosystem?
- In what ways can SSE serve as a vehicle for unlocking additional capital through innovative finance mechanisms, de-risking investments and attracting a wider pool of capital?
- What pivotal role can SSEs play in nurturing innovation and entrepreneurship in India?
- How will SSEs evolve to broaden their reach and inclusivity, ensuring that a diverse array of organisations, including smaller entities like FPOs and SHGs, can fully reap the benefits of this platform?
The session began with an overview of the philanthropic landscape in India, which has seen a substantial increase in private sector funding, reaching ₹60,000 crores in 2022. The session underscored the transformative shift towards more structured and informed philanthropy, highlighting the trend of catalytic giving. This approach places emphasis on three aspects: the nature of required capital, the journey of philanthropic funds, and the specific issues to be addressed.
A pivotal facet of this transformation revolves around blended finance models, instrumental in de-risking investments and catalysing change. Blended finance deploys philanthropic capital to attract commercial investors to the development sector, bridging the investment gap and making it more appealing to private investors. The synergistic risk-sharing mechanism encourages a more attractive investment climate and fosters collaboration among stakeholders.
Mr. Hemant Gupta shared insights into the immense potential of the Social Stock Exchange, where non-profit organisations (NPOs) and for-profit social purpose organisations come together with catalytic donors and investors willing to take calculated risks (read more about the SSE here). He elaborated on how international experiences with SSEs influenced the design of India’s SSE, including eligibility criteria and fundraising instruments. Furthermore, he provided a glimpse of SSE’s anticipated evolution over the next 3-10 years and shed light on potential challenges social enterprises might face when transitioning from traditional funding models to raising capital through the Social Stock Exchange.
If you missed the session, you can access the recording of the webinar here: