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Sir Ronald Cohen, one of the biggest names in the impact investment sector speaks to BOOM on the various business models that impact investment combines, the need to make social investment a common philosophy and the possibilities that India offers in terms of scale to implement this model.
Businesses are about profit and loss - not any more as some investors are attempting to end this old dichotomy with a new model for conducting businesses called impact investment.
The next big thing is the sector of impact investment. If we can connect people who want to launch a business venture with those who want to invest (venture capital) in them, it is also possible to connect those who want to invest in ventures that create a social impact or inflect a change," says Sir Ronold Cohen, the Chair for the G8 Global Steering Group on Impact Investing and co-founder of Apax Partners.
Sir Cohen had been invited by the Impact Investors Council, the industry association of impact investors in India to encourage policy change to help the $2-billion nascent industry in the country. He has also held discussions with Jayant Sinha, MoS, Finance and is meeting business heads, impact investors and social entrepreneurs in Mumbai, Delhi and Bengaluru.
India has a little over 50 impact investment funds which have invested a cumulative of $2.5 billion in 350-plus social enterprises, across a range of sectors, according to a report released by the Impact Investors Council. Excluding infrastructure, the more than $2 billion investments are expected to grow to $6 billion by 2020.
Sir Cohen also underlined India's unique position in terms of scale to apply impact investments. He cited the development impact bond being used in Rajasthan for checking dropout rates from primary schools for girls as an encouraging first step.