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Social venture capital in India

Nils Riemenschneider

Apurva Bamezai, Nils Riemenschneider, Sarah Keen

This project will help improve understanding of the impact of social venture capital investing in India. There is an unmet need for development capital in India’s poorest states resulting, in part, from private investor preference for ‘safer’ investments. As part of its Poorest Sates Inclusive Growth (PSIG) programme, DFID is investing up to GBP 35 million in the Samridhi Fund, a venture capital fund in association with SIDBI, the leading public sector development bank in India. The fund will invest returnable capital in socially-orientated enterprises operating in a number of sectors across the eight poorest states in India. We are designing and implementing a multi-year evaluation for the programme in partnership with EDA Rural Systems ( The team will use mixed-methods including a longitudinal panel survey and qualitative methods to assess impact at a number of levels including the household-, enterprise- and state-level. The project will run over seven years and include three rounds of data collection and analysis. The evaluation will help set some of the standards for assessing impact investing initiatives and the validity of the social enterprise model in India and elsewhere.


Despite accounting for over half the country’s population, India’s lowest-income states attract only one-fifth of domestic – and 2.4% of foreign - private investment. These disparities arise from investor preference for ‘safer’ investment options in better-established industries and markets elsewhere in the country. As a result, the states are stuck in a viscous cycle of under-investment and low rates of social, economic and environmental development.

DFID is addressing this unmet need for capital through its Poorest States Inclusive Growth Programme (PSIG). Under the programme, GBP 35 million is being invested in the Samridhi Fund, a venture capital fund managed by SIDBI Venture Capital Limited (SVCL) . The fund is investing returnable capital in socially-orientated enterprises across the eight lowest-income states, based on the premise that investment of ‘patient’ capital in high risk, promising social businesses can help secure benefits for the poor and ultimately, crowd in more investments. According to this ‘impact investing’ model, once successful, businesses should be able to attract more regular private capital, continue to grow and provide direct and indirect benefits for the local populations.

This evaluation seeks to assess the impact of the fund at a number of levels and to help inform the wider debate around the effectiveness of impact investing and its role in driving pro-poor development in India.

Our approach

The team is using a theory-based approach to evaluate the impact of Samridhi fund investments across the eight poorest states in India. As well as assessing impact, the evaluation will also consider the sustainability, scalability and value-for-money of the programme.

The team worked with DFID to review the programme’s theory of change and develop an evaluation strategy based around this. The strategy includes a variety of methodologies that operate at each different level of the programme to give as comprehensive an assessment as possible.

At the household level, a longitudinal panel survey will be developed to quantify the impact of investments at baseline, mid-line and end-line. Findings form the survey will be complemented by qualitative methods including key informant interviews and case studies.

At the investee level, the team will conduct primary and secondary research, analysing programme monitoring data and reports and conducting interviews with selected organisations. More broadly, at the fund level, the team will test the ToC by reviewing secondary sources, completing a process analysis and conducting interviews with policy-makers and other stakeholders

The team will carry out the following activities:

  • Reviewing and developing the Theory of Change (ToC) for the programme
  • Completing comprehensive literature reviews
  • Developing a mixed-methods evaluation design including a longitudinal household panel survey
  • Conducting value-for-money and cost-efficiency assessments
  • Completing analysis of impacts including disaggregation by gender, poverty level and caste/tribal grouping
  • Developing a communication strategy to effectively disseminate evaluation findings


This project will help improve understanding around the impact investing element of DFID’s PSIG programme in India. In turn, this evidence provides a basis to contribute towards programme improvements, maximising the potential for developmental impacts at the household, organisational and state level.

As well as assessing the direct impacts of the programme, this project will also help provide insights into the catalytic effect of the fund, specifically, the extent to which it helps industry grow by ‘crowding-in’ further investment into low-income states.

The evaluation will also help contribute to the development of standards for assessing impact investing initiatives more broadly. This will include the development of practical measures for generating quality data on types of outcomes and impacts that the programme is generating. In turn, the adoption of these measures will help fill key evidence gaps around the effectiveness of social venture capital in promoting pro-poor economic growth in India and beyond.