Swati Rai is a cofounder of the Aavishkaar Group and Executive Director of Aavishkaar Venture Management Services Private Limited (AVMS) since its inception. As the director on the board of AVMS, Swati Rai Chairs the Corporate Social Responsibility (CSR) committee of the Board. As the Executive Director Swati is responsible for Communication, Conflict resolution and Human resource issues at AVMS.
She was a cofounder and executive Director of Intellectual Capital Advisory services Private Limited and served on the board of Intellecap till 2007. At Intellecap she was responsible for leading Communications and managing relationship with the World Bank Group where she led the key interaction with the Consultative Group to Assist the Poor or CGAP and managed the Microfinance Gateway contract.
The Aavishkaar Group are global pioneers in taking an entrepreneurship-based approach towards development. The Group is focused on developing the impact ecosystem in the continents of Asia and Africa. Aavishkaar Group manages assets in excess of USD 1.2 Billion across Equity and Credit, with 7,000+ employees present across India, Indonesia, Bangladesh and Kenya.
01. Congratulations to the Aavishkaar Group and you, on your latest publication ‘Impact Report -2020’. The report provides an expansive and impressive impact footprint across sectors, delivery platforms and geographies. Please give us a view point of four or five key impact numbers, which reflect the quantity and range of impact created at the group level.
All numbers are very critical to us. What probably is most humbling to me personally is that, as a Group, we have been able to reach over 55 million women of the 100 Million customers. And we have been able to achieve this by taking an ecosystem approach to impact investing and not by working in isolation. Our ecosystem approach has helped reduce carbon emissions by 1.5 Million MT and we have recycled close to 85,000 MT of waste through our investments and engagements, which is significant as well.
At the Group level, we directly employ over 6500 people from across various age groups and we have a significant number of women in leadership position, which I believe shows the diversity within the Group. Further, we have supported over 11,000 MSMEs with financial services and another 2.3 million customers with micro loans - a testimony of our Group Vision to work across the spectrum.
02. Aavishkaar is a rare organization with multiple arms focussing on different facets of the impact investing ecosystem like – Asset management, Microfinance, MSME finance and Capital facilitation.
Given that the group is in a unique position to impact organizations through its lifecycle, and across different dimensions - How do you see the impact numbers break up across the four verticals? Are there any specific challenges that you face in this exercise?
We have never focussed on the individual companies even though each institution is whole by itself as the nature of outreach and connect is very different. Arohan, for instance, directly reaches 2.2 Million women and provides them with financial assistance, which is quite remarkable. Intellecap is building impact ecosystems in Asia and Africa and has a deep local presence and a major impact multiplier effect through various projects it undertakes. Ashv, similarly, would always have a small MSME outreach but a tremendous multiplier impact both on employment and livelihoods. Aavishkaar Capital, on the other hand, benefits from the spectacular impact the entrepreneurs are making and the leverage it generates by being a first investor, which sets Capital apart from other commercial investors. Fact that we have leveraged a commercial capital more than 3 times of our own capital is an impact that itself is quite spectacular. Overall, each company help us exemplify impact on the life of those who need it. Like you do not see a fist as a collection of fingers, we do not see us as amalgamation of companies.
03. Needless to say, impact measurement and management of this entire ecosystem will be a significant effort. Tell us a little about the governance processes you use for efficient impact management and monitoring?
We have been publishing impact report since 2009. I haven’t seen any other organisation publish an impact report in 2009 (not CSR nor philanthropy but Impact reports). For us, it is a part of the DNA and the Board members and CEO are directly responsible for the impact we talk about.
Let’s take the example of our focus on Gender and the dichotomy that while we have more than 97% of our clients as women at Arohan, the percentage of women employed with us is low. This was picked up as a critical challenge as the entire Group women employee percentage was impacted due to the inherent challenges of hiring women in Arohan. Our Managing Director, Manoj Nambiar, stepped up and worked towards increasing the employment of women field workers as his KPI. In less than two years, one of which has been during Covid, we have seen Arohan women employee strength move from less than 2% to 10% in the field today. With 6000 employees at Arohan, this is a major accomplishment, and we are all proud of his leadership. As I said earlier, Impact is the core reason we exist and hence it is a deep Board discussion at levels in the Group.
04. Intentionality and a deep ‘impact’ focus are integral to the ethos of the Aavishkaar Group. The organization is growing, both in terms of volume of business and the number of people. How do you manage to balance growth, expansion and intentionality all at the same time?
Aavishkaar works on a 10-year vision cycle. We are just about entering the third decade of our existence and our growth and focus on impact has been unwavering. We always talk about spirit and the process as two sides of the same coin. Both need to exist for the growth and scale to deliver impact.
We have institutionalized our process, we have tried to put together our history of impact thinking, our ESG process as detailed documents that explain to a new person how our thinking around impact has evolved. The Impact Management and Measurement Policy document is widely shared so that we can inculcate the feeling of ownership. Aavishkaar has also been very selective in its manpower strategy. We normally discourage people looking for a job to apply to us. We offer a journey and invite and encourage those who are willing to enjoy the journey with us and are not too focussed on the destination only.
05. Some of the unique things which stood out for the IIC research team when we read your report was the focus on - sustainability, circular economy related investments, and creating more opportunities for women.
Is this an integral part of your larger impact strategy? Do you foresee any specific challenges in building an impact thesis around these critical agendas?
As I mentioned earlier, we document and discuss our evolution. If you read our genesis and journey in the Group Impact Report, you’ll notice that our thinking around impact in 2001 was very different from what it is in 2021. At one point, we looked at every business and measured the impact it created. As we chose to be a catalyst, we understood the role of leverage in delivering impact. We were probably the first and only organisation who made a distinction between Fund impact and Enterprise impact and made a distinction between direct livelihood and indirect livelihood. Lately, we have focussed a lot more on systemic impact as distinct from direct impact. Sustainability and Circular Economy related investments are systemic choices we are making to deliver impact. Sometimes it is difficult to draw correlation as the direct impact of these initiatives could be low, but the systemic impact on poor, underserved and needy is huge. Our investment in Soulful, a company that was trying to create its brand in millets-based breakfast cereal was one such example. Most of our capital was used to build the brand; however, a systemic impact of the investment was created with increase in the scale of millet-based, new age food. Thus encouraging farmers to produce dry land crop that conserves water, pesticides and fertilizers, and support health and wellness.
06. In his note, Mr Vineet Rai, Founder and Managing Director, Aavishkaar Group, has set an ambitious goal for the group, which is to become an impact unicorn over the next decade and impact a billion lives (compared to the 100 million lives presently). Please do shed some light on how the organization is thinking about achieving this goal - new initiatives, key strategies across sectors.
Unicorn is a deeply eulogized word in the commercial world driven largely by a benchmark position. Vineet has a knack of connecting the commercial with the impact world and I think he was trying to draw upon our focus of being distinct from the many others while coining the term. The bigger statement probably that you may not see in the Group Impact Report but he made in the cover note is “We commit that by 2030 Aavishkaar Group will be Gender Neutral. This to me is a brave and audacious statement as we are talking about gender neutrality across all what we do, our borrower, investor, board, employees, products, services. We know it would be a challenging task; however, it would be a worthy ode to achieving the Sustainable Development Goals if we can achieve this goal by 2030.
