Topic Creator

Renu Garg

Stock Exchange for NGO

Stock Exchange for NGOs (Social Stock Exchange)
Finance Minister Nirmala Sitharaman, in the Budget last week, announced that the government plans to create a social stock exchange (SSE), a platform on which social enterprises, volunteer groups and welfare organisations will be listed so that they can raise capital. The proposal has attracted much attention, and social entrepreneurs, among others, have said that the move can have a revolutionary effect on how they tap investors for capital.
What Social Exchange will do ?
an SSE will bring together social enterprises and impact investors on a common platform. On this platform, investors, like in any other stock exchange, will be able to buy shares (trading of securities or potentially debt, in the form of bonds) of listed entities — in this case of a social enterprise which has a mission aligned to their interests. On the exchange, a listed entity’s value will be linked to its social impact.

Do We have Social Stock Exchange in other Countries ?

Many SSEs have emerged across the world over the last two decades. Brazil was the first country to have a SSE, 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 and are still in an early stage.

One of the most successful SSEs is Singapore’s Impact Investment Exchange Asia. Set up in 2013, the public SSE is helping raise an impact investment capital of around $40 million and has built a network of over 30,000 partners. By 2016, the SSE has already raised a capital of $12 million resulting in 26 deals.

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 know about India’s plan so far. Studying successful SSE models around the world should be the first step in the development of India’s own SSE.

Posted in Law & Policies - Common People on July 12 2019 at 08:58 AM


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