GC2025 Insights: Pioneering Impact - Vineet Rai's 20-Year Journey Building Ecosystems for the Underserved

In the following episodes, we bring you insights from this year’s AVPN Global Conference (“GC2025”), held September 9-11 in Hong Kong. There will be episodes highlighting thought leadership from prominent speakers. This includes snippets from speeches, and special features of our speakers on Impact Investing Day (September 10).

Impact investing is entering a new era - one where Asia is no longer following global trends but actively shaping them.

In this episode, we hear from Vineet Rai, Founder & Vice Chairman of the Aavishkaar Group. Founded in 2001, Aavishkaar Group has grown to $1.2 billion in assets under management as an all-rounded impact investing platform today. They continue their influence as a global pioneer in impact investing, with a focus on microfinance, MSMEs, early/growth stage equity, credit, alongside ecosystem building and advisory across Asia and Africa. From his sharing, we have the opportunity to hear insights from a two-decade journey building one of the most comprehensive impact ecosystems in the Global South.

Vineet reflects on:

• How impact investing has evolved over two decades, and why intent and context - beyond outcomes - differentiate it from mainstream capital?
• Why is Asia becoming a major source of impact capital, with local resources from India, China, Singapore, Japan, and the Middle East reshaping the ecosystem?
• What it takes to scale impact in emerging markets - from ecosystem building to accepting unpredictable returns - and Aavishkaar's vision to reach $7 billion AUM by 2035?

Transcript

SPEAKER_04 0:01

I believe the world has an opportunity to change like it has never existed before. A world without hunger, without poverty, without inequity is a great goal. To the impact investors, your role is a support cast. You will never be the main actor.

SPEAKER_03 0:17

Welcome everyone to Impact Investing Music, a podcast series where we delve into the ever-evolving world of impact investing and aim to connect, educate, and share knowledge to drive capital towards impact. I'm Vikasterora, Chief of Impact Investing at AVPN.

SPEAKER_01 0:35

And I'm Jackie Hawkins from Delbert. In this episode, we hear from Veneeth Fry, founder and vice chairman of Avish Baal Group.

SPEAKER_02 0:43

From his sharing, we have the opportunity to hear insights from a two-decade journey building one of the most comprehensive impact ecosystems in the global south. Let's dive in.

SPEAKER_04 0:54

Avishkar is a pioneer in impact investing. We started in 2001. Currently managed $1.2 billion in assets. Today we are a platform on impact investing, investing across microfinance, MSME, and early stage and early and growth stage equity investing as well as credit platform. We also do ecosystem building and advisory across Asia and Africa.

SPEAKER_00 1:22

So I guess you've really seen the full evolution of the sector, right? How much has it changed, especially in the last few years? What are some of the trends that you've seen?

SPEAKER_04 1:30

So I think the most important thing that's happened in impact investing is an acknowledgement that entrepreneurship can make a difference to the lives of the people living coming from the economic, lower economic strata. That's, I think, is probably the largest change we have brought in. But three-fourth uh emerging trends that actually make this look very interesting. The first part is that while most of impact investing was taking place in Asia, most of the capital was coming from Europe and US. That trend has started to shift. We started seeing more and more Asian countries, both local resources coming from the countries like China, India, Indonesia locally coming in. But now we are seeing Middle East, Singapore, Japan playing a significantly larger role in the impact investing, both in terms of the learnings that they are having and the way they are channeling capital and participating in the impact investing taking place in Asia and Africa. And I think that that probably is the most significant trend I have observed over the last two decades or so of my own participation in impact investing.

SPEAKER_00 2:42

What kind of advice do you have for people that are from these regions that perhaps want to enter into this space or perhaps are new to the impact investing field? What are some of the first steps that you would advise them to take?

SPEAKER_04 2:52

So I'll divide the advice to two in two parts. To those who are entrepreneurs, if you are getting into the space of impact investing, uh and this is to any entrepreneur, whether you're getting into impact or otherwise, entrepreneurship is a journey, not a destination. It's not a game of delivering large impact or la or building significant valuations. It's an impact of achieving a goal. And so therefore don't expect a destination, enjoy the journey, and you will see success at the end of it, whether it is changing lives or building valuation, whatever is your aim. This is to the entrepreneurs. Uh to the impact investors, if you want to actually build uh either build an impact investing platform or participate in an in a professional journey with impact investing. Uh, it's a long journey. It's a long, steady journey. Uh you have to look at the joy of change that you're bringing in. Uh you have to also acknowledge and accept that you are one step away from making the difference. You are not on the ground. Uh so it's a reflected glory. Uh be humble, understand that the entrepreneur is making the change, and your role is the support cast. You will never be the main actor.

SPEAKER_00 4:05

Can I hear a little bit of your personal story? How did you get into this space? What got you interested in the field?

SPEAKER_04 4:10

I started when impact investing as a term didn't exist. So I started when I was 29 years old, I had $100. I was very convinced that entrepreneurship can bring a serious change in the ideal life of people living in the lower economic strata. Uh and my job should be to find capital because one of the biggest challenges most entrepreneurs told me was there's no capital. Now, this is 2001, venture capital itself was in a non-existent in India. I was trying to do impact investing, which actually as a nomenclature did not exist. So it was a huge challenge. I started with $100, now we manage 1.2, so we must have done something right. But the learning has been fantastic. Uh my forestry background helped me understand that ecosystem building is very critical for any impact to be delivered. And what is ecosystem? Ecosystem is when you allow all kinds of entrepreneurs to thrive. So there could be microfinance entrepreneurs, there could be micro-small, medium enterprise entrepreneurs, there could be those entrepreneurs who are building significant scale. There has to be financial instruments that help each one of them succeed and thrive. And that's really what an ecosystem is all about. There is also other kinds of actors. So you have government, you have corporates, you have investors, you have mainstream investors. And the role of an impact investor is to engage with each one of them to make and facilitate the life of the entrepreneur, becoming easier, better, and smarter. Impact is contextual and local. So if you sit in London or UK or Geneva, you see impact very differently than when you sit in probably Mumbai or Jakarta or somewhere else where you're close to impact, but still not very close to impact. But if you are the person who was being impacted, sitting in a village somewhere in Bali or Sumatra or UP or wherever in India, somewhere or China, you see impact very differently. So impact is contextual and should be viewed from the person who is being impacted and not the person who's giving money. There is an overfocus on reporting of impact. So while counting impact is very important, but the quality of the impact and the intent behind the impact is really what makes impact investing different.

SPEAKER_00 6:20

So what are some of these intangible impacts that you talk about? What is something to look out for?

SPEAKER_04 6:25

When you do impact investing, you have to have a deliberate desire to move go and impact those who are being left out. That means the mainstream capital does not have the desire or appetite or feels there is a strong commercial case to get engaged. Remember that commercial capital will always engage if it sees there is a potential. So the reason impact investing goes in is it actually identified a group or niche, a challenged community which is not part of the mainstream and tries to pull them through, which means you are taking extraordinary risk for probably classical returns. Now that extraordinary risk means that your ability to generate the same kind of returns is always challenged. So I'm not saying you have to generate lower returns, I am saying you have you are generating returns that are probably unpredictable. And I think a lot of investors do not understand because they understand high risk, high reward, and then they say high risk, no reward, but we are talking about impact investing, high risk, unpredictable reward. We don't know it is high or low. And on a portfolio basis, because it is unpredictable, you might have a portfolio that may relative to any venture capital fund, might actually struggle. So it's not really that impact investing is asking for concessional returns. Impact investing is actually pointing towards unpredictability in returns. Acceptance of that argument is very low right now in those who are new to impact investing.

SPEAKER_00 7:52

What are some of the sectors that you feel like are underserved in the impact investing market?

SPEAKER_04 7:56

So I think more than sectors, it is the geographies, because sector is actually a state of ecosystem maturity. So for example, in 2001 to 2010, uh microfinance was the evolving sector in India, but nobody wanted to get into housing, low and low-income housing or into agrich or into agriculture and those areas. Today we actually have microfinance is doing reasonably well, very strongly well. Actually, it's very commercial now. Housing finance is also very commercial now. So financialization of poor people is very commercial now in India. But if you actually get into something else, for example, how do you actually do health technology, health technology for poor people, that remains actually on the fringes. Similarly, I mean there are many other things which remain on the fringes. But if you go to Africa, financialization of poor itself is actually on the fringes. So depending on the geography where you operate, you may actually need to look at all the instruments that are there and look at the sector. So every sector from climate to energy to education to food to agriculture, each sector has a role to play in every geography. And depending on the maturity of the ecosystem, these sectors are at different levels. Of course, uh there is a new talk about artificial intelligence, and then there is a new talk around artificial intelligence for impact. These are questions that may have answers in the future. Uh, but on the fringe of it, they are exciting sectors of the future given a large amount of capital will move into those spaces.

SPEAKER_00 9:34

Well, speaking about the future, what is your dream for the future? You've seen so much impact. Is there a desire to evolve?

SPEAKER_04 9:40

So Avishkar is right now as I have assets in management of around 1.2 billion. Uh by 2030, we expect it to at least treble. We are looking to reach 3.6 billion. And by 2035, we expect to reach uh around 7 billion, so double from the next five years. Uh now these numbers actually in itself mean nothing. Uh what we are trying to do is build an a very evolved impact ecosystem where we serve the poor across the various uh positions. So, as I said, the whole ecosystem of products and services. So we are a financial ecosystem, but we are also getting into climate, we are getting into carbon, we are trying to do uh agri-education, financial services, and we are using philanthropy as well. And uh using all kinds of financial instruments to actually allow agriculture farmers to prosper, uh, the children of farmers actually to become future entrepreneurs, people coming from lower strata actually participating in entrepreneurial uh thought process, educating and strengthening the local ecosystems across Africa and Asia. These are some of the ambitions. These are not easy ambitions. We are talking about 3 billion people, so that's a very large ambition. We are too small. And individually, institutions won't be able to do it, but collectively we can. Avishkara is 10,000 people. We are hoping that the number of people, along with our alumni, people who have left us and gone and become very successful doing their own things, we may be able to influence the world. The most important, the final thing. Uh in 2018 we wrote a report called Better Business, Better World. This was done under Business Commission, Social and Business Commission. Uh Paul Pallman and Mark Malik Brown were the leaders, I were the commissioner. And in that report, we talked about 2.5 trillion every year that needs to be invested for the world to change. Uh, that is, by 2030, no hunger, no poverty, no inequity. I think that ambition stays, but that ambition to be realized may not happen by 2030. I believe the world has an opportunity to change the world like it has never existed before. A world without hunger, without poverty, without inequity is a great goal. And more we can convince the young people to join this goal, that will be a great success for all of us.