Social ventures attract overseas investors

As a new business in India offering environmentally-friendly rubbish disposal, ScrapApp has boomed in the past year while helping address one of the nation’s major problems - garbage.

In India, where recycling rubbish is not part of the formal sector, masked workers from social enterprise ScrapApp sift through mounds of rubbish daily at India’s largest mall, DLF Mall of India, separating recyclable trash from other waste.

The mall contract is the jewel in the crown for the year-old start-up, one of a growing number of social enterprises in India which are seeking funds to create businesses with a mission to tackle social problems.

A Thomson Reuters Foundation poll of nearly 900 experts on the best countries for social entrepreneurs found access to investment was one of the key challenges in the growing sector. But India was one of the countries where it was easiest to access investment, coming behind Canada, Singapore, the United States, and Belgium.

ScrapApp’s CEO Vidhur Bakshi, 27, said overseas may be the best place to seek funds to have an impact in India where one-third of the 1.3 billion population live below the poverty line and garbage pollutes streets and rivers and spreads disease.

“There are sources of funding within India, but it is not easy, most people want a quick return,” said Bakshi, who started ScrapApp in September 2015 with three colleagues.

“There are a lot possibilities if we explore sources of finance overseas.”

The poll, carried out in partnership with Deutsche Bank, the Global Social Entrepreneurship Network and UnLtd, foundations for social entrepreneurs, surveyed social entrepreneurs, academics investors and support agencies in the world’s 45 biggest economies as ranked by the World Bank.

The survey found the difficulty in accessing funds was compounded by a lack of public awareness about the work of social entrepreneurs who can run for-profit or non-profit businesses which try to drive social change.

While there are growing sources of capital within India, many entrepreneurs say it is easier to scout for funds in countries with better recognition of social entrepreneurship.