Social venture funds for the Base of the Pyramid(BoP)

Abstract

India is a country with one of the largest populations in the world and has about a third of its population not only living below poverty line but around 50 percent living on less than 100 rupees a day. With the number of poor being so large in number, it is essential that the upliftment and development of these people is essential for the overall development of the country. The government is making efforts to provide the base of the pyramid with low-cost housing, subsidized food grains, free electricity, free education amongst others but the execution of such schemes introduced by the government is not very fool-proof, with the benefits being usurped by undeserving middlemen, and difficulty in monitoring if they are percolating to the BOP or not. These schemes just provide them with what is needed in the present to fulfill their needs. However, to help them grow, earn a living for themselves and lead an independent life, successful efforts have not been made by the government yet. There are NGOs which help such people build vocational skills, get jobs at places from where they can get their basic salaries and feed their family members etc, provide financial help to the farmers for buying seeds, provide free pesticides etc but the question is for how long will these NGOs continue working? Is their model a sustainable one? To answer this question we have social venture capital funds which help organizations have a continuous inflow of money to help the poor, but also improve their functioning making them self sustaining as well as profitable, ensuring growth and improvement in the standards of the BOP. The focus of our study hence is on Social Venture Capitals (SVC) and the business model of one SVC in particular - Lok Capital.