The Government of India took the lead in proactively announcing the creation of a Social Stock Exchange (SSE) a year ago in July, 2019. This is expected to produce a major shift in how social sector projects get funded and can prove to be a gamechanger for the sector, especially considering the post-Covid scenario.
While the current crisis has reaffirmed the need and relevance of NGOs, it has also exposed the survival challenges that many of them are facing as their funding sources are drying up.
A functioning SSE is an opportunity for NGOs for scaling up social action while at the same time ensuring a reasonably stable financial pipeline with integrated accountability frameworks.
What are such exchanges and why do we need them? The SSEs are trading platforms that allow social businesses to raise capital by attracting ethical investors willing to invest in businesses that have a dual corporate and social mission.
India has chosen to have this embedded within the Securities and Exchange Board of India (SEBI). Several countries have attempted full-scale SSEs or equivalents of them with differential levels of success.
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