Grameen Capital to be part of conscience-capitalism ecosystem


Chris Wright
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CEO has broader ambitions as firm turns 10; impact investing still modest in Asia but growing.

Ten years on from the foundation of Grameen Capital India, its chief executive still has a mission.

Royston Braganza,
“It’s my crazy dream,” says Royston Braganza. “A capital-with-a-conscience ecosystem, with a social investment bank, a social debt vehicle, a social equity fund and a social stock exchange.”

The first of those four components is Grameen Capital itself, founded as a joint venture between Grameen Foundation USA, Citi and IFMR Trust, and whose 10th anniversary passed on Sunday.

“We were globally the first social investment bank, set up as a social business primarily because we spoke both languages: that of the capital markets and of life at the bottom of the pyramid, where there were 400 million people living below $1.50 a day,” Braganza says, speaking to Euromoney at a BNP Paribas conference on sustainability.

“We were set up to be a connector, to become the pipes through which liquidity can flow.”

Grameen Capital serves microfinance institutions (MFIs) and similar organizations, providing them with debt and equity solutions to build scale. At first it was mainly about raising debt for them; then, given the leverage that created, the bank helped them raise equity to de-risk.

“Along the way we began to find a wide spectrum of investors: social investors, commercial investors, and all the double bottom-line funds in the middle that have come of age over the last few years.”

However, having a social investment bank is only part of what Braganza wants to see.

“How do we create the whole spectrum?” he says. “My biggest concern is that social entrepreneurs spend too much time on capital raising rather than focusing on the poor client. How do we take that headache off them? How do we create the institutional backing and market knowledge to be able to help them focus on the client?”

Next step

The next step will apparently be the social debt vehicle, following a fundraising close at the end of 2017, although Braganza is unwilling to talk more about its structure until a body of lending has taken place through it.

“The other two [a social equity fund and a social stock exchange] are still in my head,” he says.

In fact, the last of them might take care of itself.

“A social stock exchange could probably be redundant if we have a good crowd-funding strategy,” says Braganza. “It’s about democratizing funding access to social enterprises.

“One of the hardest pieces is getting domestic funding. There is a lot of funding coming out of Europe and the US, but getting the local markets? Traditionally people wear a philanthropic hat or a commercial hat; getting them to wear both at the same time and think of a double bottom-line return is challenging.”

Braganza adds: “To my mind, there is enough capital in India to take care of all of India’s problems. How do you educate investors to be able to see it through that lens? That’s been the hardest piece and a lot of our blood, sweat and toil has gone into creating that awareness.”

Grameen has attracted some notable Indian names into Braganza’s planned ecosystem, among them L&T Finance, Ratan Tata, Shrinivas Dempo of the Dempo Group, the venture capitalist Patni brothers and the investment banker Vikram Gandhi.


Impact investment still appears to be in its infancy in Asia, although the true picture is more nuanced.

The Global Impact Investing Network (GIIN) published a survey in May suggesting that Asia accounted for just 12% of impact investing assets under management (5% south Asia, 4% east Asia and 3% southeast Asia). Its survey, covering 208 respondents managing $114 billion of impact investing assets, found that only 17% of its respondents were based in emerging markets and just 2.5% in Asia.

This might partly reflect a question of definition, though.

Abhilash Mudaliar,

“There are certainly some investors who are having an impact in the region through their investments, but may not call themselves impact investors or even be familiar with the term,” says Abhilash Mudaliar, director of research at GIIN. 

“To date, impacting investing still originates in Western Europe and North America, but we do see local investors like wealthy families, foundations and banks starting to adopt the label.”

The same survey found that 25 investors in its sample planned to increase allocations to southeast Asia and 17 to south Asia.

“In Asia, given the extremely large population and the fact that many people don’t have access to basic services like energy and healthcare, those tend to be themes investors in Asia are motivated by,” says Mudaliar, who says agriculture is another popular theme.

He says a growing role for locally based institutions is “understanding that an investor can take on a certain degree of risk in order to catalyze more investment from a commercial investor. We often see family offices or foundations playing that catalytic role.”

Others invest directly into MFIs such as Grameen, although Mudaliar says the two groups, while overlapping, are different.

“Impact investing sits a level above microfinance,” he says. “But investors may invest in MFIs, which then in turn lend small volumes to underprivileged populations.”