New Delhi: The National Innovation Council, in partnership with the Ministry of Micro, Small and Medium Enterprises (MSME), launched the India Inclusive Innovation Fund (IIIF), an impact investment fund that will invest in ventures catering to the country's poor.
The Rs 500-crore fund, which will be registered under market regulator SEBI's Alternative Investment Fund regulations as a Category -I venture capital fund, will invest in social ventures operating in areas such as healthcare, food, nutrition, agriculture, education and skill development, energy, financial inclusion, water, sanitation and employment generation.
"The needs of the people at the base of the economic pyramid are today served by philanthropy and government grants and subsidies which can never be either adequate or scalable," said Sam Pitroda, chairman of the Council.
Pitroda, who is also the advisor to the prime minister on public information, infrastructure and innovation, said that the fund will look to expand its corpus to Rs. 5,000 crores over the next 24 months.
While the ministry of MSME has committed Rs 100 crore, or 20% of the fund's corpus, with the balance raised from banks, insurance companies, and overseas financial and development institutions.
The India Inclusive Innovation Fund will also partner with various incubators, angel networks and public R&D programmes and laboratories, to identify and invest in ventures that are involved in socially relevant technologies and solutions, with a focus on commercialising the same.
"IIIF seeks to leverage the model of venture capital to transform the lives of the less privileged," said Pitroda.
According to a press statement released by the National Innovation Council, the government will not be involved in the day-to-day operations of the fund, which will be entrusted to an asset management company (AMC), set up as a Section 25 not-for-profit venture.
The AMC will appoint a professional management team for this purpose as also an Investment Committee comprising professionals of repute, which will take all decisions, relating to investments and divestments. A Governing Council comprising government nominees as well as eminent persons from the fields of public service, industry, finance and entrepreneurship will provide oversight.
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