Catalysing Impact First Entrepreneurship to create Dignified Jobs for the Poor in India

Intervention

Social or environmental challenge

Inequitable economic growth: India's rapid economic and technological growth has not proven inclusive. According to the World Inequality Report 2022, the bottom 50% of Indian households own only 6% of the total wealth in the country. The top 10% and 1% own, respectively, 65% and 33% of the total wealth.

Majorly informal workforce: In India, 10 percent of the population lives on less than $2.15 per day and nearly 90 percent of employment is informal with unreliable income streams, unsafe work environments, and inadequate social protections.

SGBs are considered uninvestable: While SGBs are the largest job creators in India, they fall into the 'missing middle': too large for microfinance but too small, unproven, or risky for traditional investments.

Twofold challenge: connecting more people in extreme poverty with dignified work to break the cycle, and supporting businesses that bring stability and safety to sectors that otherwise rely on informal employment.

Description of the intervention

"The project will incentivise Small and Growing Businesses (SGBs) in India for creating dignified jobs for the poor and underserved. We will design a standardized incentive model, leveraging data from our ongoing benchmarking study with 60 Decibels on quality of jobs. We will build on learnings from Upaya’s 35+ investments in SGBs in India in the past 12 years. This incentivized model will be implemented and scaled through Upaya's initiative, Dignified Jobs Collaborative, which currently has 7 investor partners, namely- Acumen, Ankur Capital, Beyond Capital Fund, Elea Foundation, Yunus Social Business, S3IDF and Upaya Social Ventures.
SGBs create 60% of new jobs in emerging markets, largely informal, profoundly impacting livelihoods and economies. In 2021, SGBs in India mobilized $6.8 Bn in investments. India's impact investing industry is recording a year on year growth of approximately 21% and is expected to grow exponentially by 2030. Impact investors must commit to creating high quality, not just high quantity, jobs for the poor. Investors must also mitigate any negative impacts in jobs being created including checking on exploitative employment practices. This can only be achieved through a commonly accepted metric of job quality contextualized in emerging markets to allow for outcomes verification."

Last data update

Data for this pipeline project was last updated in March 2024