Social Stock Exchange

Group Presentation
What it is?
A social stock exchange, is a platform that allows investors to
buy Shares in a social enterprise that has been vetted by the
exchange. In the social stock exchanges the value of
instruments like shares depends on the social impact of
organization or the company, on the society.
Objective
This is a revolutionary concept to provide an avenue to social enterprises, volunteer groups
and welfare organizations, so that they can approach and tap the reservoir of investors for
capital.
We all are aware that one of the main concerns of the society has been to remove poverty and
transfer the benefits of economic growth to the last person in the line.

Social finance makes a compelling promise: to make the world a better place by harnessing
the power of the market to address pressing global social challenges—to do well financially by
doing social good. In order to fulfill this promise, however, social finance—or impact
investing—must strike a delicate balance between two historically opposed imperatives: profit
and socialbenefit.
Social Enterprise
It is a revenue-generating business, but with a difference — its primary objective is
to achieve a social objective. It does not ignore pursuit of profit but its primary
goal is social service. While pursuing social goals, the social enterprise does not do
away with profit because it ensures the sustainability of the entity.

A continuous flow of profit helps social enterprises plan and execute long-term
programs, and bring on board the required technology and professionals. Profit,
which makes social enterprises sustainable, differentiates them from charities.
Charities also have a social mission, but they are fully dependent on donations.
SELCO: Real Social Enterprise
An example of a social enterprise is Bangalore-based SELCO.
This is an entity involved in the ‘delivery of last mile sustainable
energy solutions’. SELCO says, it “has maintained modest profits
in the last eight years with growth rates at an annual average of
20 per cent.
It has reinvested its profits back into the company”. SELCO
views energy access as an underlying precondition to facilitate
progress related to health, education, livelihoods, financial
inclusion and so on leading to overall improvement in quality of
life. It understands the root of the problem within context and
then assesses how energy can
resolve it.
Impact Investment
Impact investments are investments made into companies, organizations and
funds with the intention to generate social and environmental impact alongside a
financial return. Impact investments can be made in both emerging and developed
markets, and target a range of returns from below market to market rate,
depending on the circumstances. Since the term impact investing was coined in
2007, we have witnessed increasing amounts of funds being channeled into
Impact Investment. This demands special consideration, especially for those
interested in improving global social welfare and in using law and regulation to
support that effort.
Impact Investments: Fact check
Globally, around 1,300 organizations manage $502 billion in
impact investing assets, Global Impact Investing Network says.
Impact investments are growing in India too, and in six years
between 2010 and 2016, the impact investing sector in the
country attracted over $5.2 billion that is approximately 36000
corores in Indian rupees.
Over $1.1 billion that is 7700 corores approximately In Indian
rupees which was invested in 2016 alone. And this investment is
growing at an annual rate of 14 per cent.
Social Stock Exchange Functioning
Such platform would function in the same manner as a
normal stock exchange does. But such platform will be
created to serve the society, generating source from the
society and giving back to society in form of welfare,
upliftment through providing great infrastructures like roads
schools hospitals etc. Social stock exchange and electronic
fund raising platform will be created with regulations of SEBI.
Some Countries with SSE….
Singapore Canada South Africa

Impact Exchange opened in
June 2013 and is the only
public SSE. It aims to provide
information about valued
social businesses and impact
investing funds. Interestingly,
it also includes nonprofits in
its list of issuers, which can
issue debt securities such as
bonds.
Social Venture Connexion
opened in September 2013. It
holds itself up as a “trusted
connector” whereby it
provides social businesses
with access to interested
impact investors, service
providers, high visibility, and a
means to value their triple
bottom line at affordable
prices.
SASIX was the second global
SSE. It opened in June 2006 in
an attempt to provide vital
finance to unknown social
businesses. It works like a
conventional social stock
exchange and offers ethical
investors a platform to buy
shares in social projects
according to two classifications
sector and province.
...and their outcomes
Many SSEs have emerged across the world over the last two decades.
Brazil was the first country to have a SSE; it was set up in 2003. Since
then, many countries, like Canada, the United Kingdom (UK), Singapore,
South Africa, Brazil, and Kenya, have also followed with their own models.
Most of these came up in the first few years of this decade.
One of the most successful SSEs is in Singapore. It is known as Impact
Investment Exchange Asia. It was set up in 2013. This SSE is helping raise
an impact investment capital of around $40 million per year and it has
built a network of over 30,000 partners.
The UK’s Social Stock Exchange, which was also set up in 2013, has
started delivering. In 2016 alone, its members raised £400 million
for, among other things, affordable housing, clean energy, and new
healthcare facilities.
Therefore, a number of countries have tried developing SSEs and they
have worked too. But a lot depends on the framework, and little is
known about India’s plan so far because finance minister in her
budget speech has simply thrown the idea of setting up social stock
exchange. Studying successful SSE models around the world should
be the first step in the development of India’s own SSE.
Social Stock Exchange in Indian Context
● Access to debt and equity is a huge barrier to growth and sustainability
but social stock exchange has solved this problem.
● Cheap capital means low dependency on foreign donors.
● Over the last few years govt has acted against many NGO’s that has led to
40% decline in flow of funds.
● SSE helps growing investment market in india and makes it more
regulated.
● SSE promotes competition between firms and maintains market
discipline.
● SSE has helped easy access to impact investment , reduced the burden on
govt. and serves as an important channel for international development
finance.
Current challenges
● The biggest issue is still accreditation at all levels
● The criteria of distinguishing between asocial enterprise and a normal
enterprise doesn’t exist in India.
● Education, training and awareness.
● Creation and establishment of social businesses.
● Formulation of right policies and regulation to support social finance
markets.
● Need to provide more seed funding for R&D to understand and gauge
the necessary drivers for impact investment, and boost the
organizational capacity of the social sector.
Conclusion
It can be suggested that the regulation should be similar to the conventional
stock exchanges but there special needs must be kept in mind.
A unified platform can bring in greater transparency for nonprofits, and help
both individuals and the corporate sector evaluate organizations they would
like to give money to. Such a platform can help with both discoveries of
organizations and in impact evaluation, which is otherwise expensive. In that
end we must conclude with a positive note that the fund channeling capability
of social stock exchanges for the purpose of upliftment of society will certainly
be a game changer for those who have fire to do something for the society but
lack resources.
Thank you!
Team
01 | Navya
02 | Mehak
03 | Aditi
04 | Vinay