Introduction
The Samridhi Fund is an approximate Rs. 430 crores social venture capital fund backed by the Small Industries Development Bank of India (SIDBI), the Department of International Development (DFID), the Life Insurance Corporation of India (LIC), and United Insurance Company Limited (UIIC). The Samridhi Fund’s main goal is to give risk capital to scalable businesses that deliver economic, social, or environmental benefits to the underprivileged in India’s low-income states. SIDBI Venture Capital Limited (SVCL), a subsidiary of SIDBI, manages the Samridhi fund.
Highlights of Samridhi Fund
Companies with a developmental impact in low-income Indian states such as Bihar, Uttar Pradesh, Madhya Pradesh, Odisha, Chattisgarh, Jharkhand, Rajasthan, and West Bengal are eligible for this fund. These businesses should also have the following characteristics:
- To qualify for the Samridhi Fund, the businesses must be financially sustainable.
- Enterprises must provide access to impoverished markets in order to get financial help from the Samridhi Fund.
- The company must have a social impact, whether as clients, producers, or employees.
- If a corporation improves the flow of cash into India’s low-income states, it can readily benefit from the Samridhi Fund.
- The Samridhi Fund provides financial assistance to businesses that focus on environmental, social, and governance issues.
Investment Benefits and Target Sectors
- The Samridhi Fund provides financial assistance to social entrepreneurs that can generate both financial and social returns.
- The fund is primarily for businesses that have a developmental impact in India’s low-income states.
- As previously stated, the Samridhi Fund’s major investment objective is growth stage investments in enterprises with target beneficiaries from India’s eight low-income states.
- It is also available to businesses with a proven business plan and a strong promoter with a skilled management team that creates jobs.
- The Samridhi Fund is available to businesses that improve the poor’s disposable incomes, quality of life, and infrastructure in India’s eight low-income states.
Samridhi Fund is available to MSMEs and is primarily focused on the following high-impact sectors:
- Water & Sanitation
- Affordable Healthcare
- Agriculture & Allied services
- Clean Energy
- Financial Inclusion (Including MFI’s)
- Education
- Skill Building, etc.
Application Process for Samridhi Fund
- The funding process typically takes 3-6 months, and involves the following stages[1]:
- Go/No Go Decision – based on preliminary review by SVCL and a presentation by the company, a decision will be made by the Investment Committee (IC)
- Detailed appraisal by SVCL team
- Final Investment Committee Decision
- Due Diligence and Documentation
Implementation of Samridhi Fund
- Samridhi fund has provided great relief to the start-ups facing financial crunch in their initial years. Some of Start-ups which has received such benefit is as follows:
- Solar Power solution start-up Oriano was granted Rs. 3 milion dollar from the samridhi fund for their support and growth. Later one of renewable energy sector start-up called Clean Max Enviro Eneregy solutions pvt. Ltd. Futher as of 2017, Oriano has decided to facilitate debt funding worth around $177 million to Ostro Energy Pvt. Ltd, a renewable energy platform backed by emerging markets-focused private equity major Acts.[2]
- Indore based Gramco Infratech, a rural infrastructure company, has raised Rs 15 cr from impact investing fund Samridhi.[3]
Conclusion
The Samridhi Fund has provided the start-ups a much needed support at the crucial point of time. The Fund has stood true to its objective wherein it has targeted lower income states extended support to the budding start-up in these states. It is relevant to infer that the fund has been considered one of the successful initiate taken under the umbrella of start-up India.
[1] https://www.startupindia.gov.in/content/sih/en/government-schemes/samridhi_fund.html
[2] https://www.vccircle.com/own-branded-certification-leader-upgrad-knowledgehut-to-cross-usd-45m-in-revenue-in-2022-aims-at-usd-100m-by-2023
[3] https://nextbigwhat.com/gramco-funding/
