Social Impact Fund for Women Micro Entrepreneurs

Social Impact Debt Fund for Women Entrepreneurs, India will focus on access to first stage institutional capital and affordable cash credit loans to enable future capital infusion by mainstream institutions.

By

Mann Deshi Foundation

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Social causes

Beneficiaries

SDGs covered

Endorsed by

Mastercard Center for Inclusive Growth

Market of Implementation

  • India

Problem

Women entrepreneurs in rural economy have benefitted from several rounds of microfinance loans. Overt time their businesses have expanded and so have their aspirations for bigger loans. However microfinance sector since a decade has no product innovation to meet their cash flow debt needs. They are doing their own asset financing by multiple borrowing, servicing processing fees multiple times and thus increasing their risks. Entire energy is consumed to ensure timely repayment of loans and thus leaves them with little time to actually focus on their business. Women micro entrepreneurs due to lack of collaterals and structured form of businesses are currently unbankable by mainstream financial institutions. Interest rates serviced by these women to meet their working capital needs are extremely high. There is no sector innovation to design a cash flow based loan products with nominal interest rate for women micro entrepreneurs in the informal economy.

Solution

The Social Impact Fund (Alternative Investment Fund – CAT 1) aims to invest in MFIs / NBFCs with a clear end use mandated to chanelise the investment to provide need based cash flow debt loans to women micro entrepreneurs working in informal economy across India.
  • Design a product to provide cashflow based working capital loans to women micro entrepreneurs and women farmers for agriculture.
  • Provide access to affordable finance for women micro entrepreneurs
  • Create a network of stakeholders across the MFI / NBFC sector for product innovation to work with women micro entrepreneurs
  • Encourage investors from mainstream finance to look at multiplier effect of their investments not limited to financial returns but also focus on social returns.

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