Calculate your SIP ReturnsExplore

How Has Social Stock Exchange Revolutionised Funding and Accountability

19 June 20243 mins read by Angel One
How Has Social Stock Exchange Revolutionised Funding and Accountability
ShareShare on 1Share on 2Share on 3Share on 4Share on 5

The Social Stock Exchange (SSE) segment provides Social Enterprises—both Non-profit Organizations (NPOs) and For-profit Enterprises (FPEs) engaged in eligible activities—a unique opportunity to register and raise funds on a recognized exchange platform.

Ecosystem Components

  • Demand Side Ecosystem: Social organizations.
  • Supply Side Ecosystem: Investors.
  • Infrastructure: The SSE and its intermediaries.

Key Benefits of the Social Stock Exchange (SSE)

  1. Efficient Access to Markets: The SSE enables a common platform that enables social enterprises and investors/donors to engage and interact in a well-defined, regulated and administered environment, hence ensuring mutual confidence, transparency and the sanctity of accountability.
  2. Synergy Between Investors and Investee in Social Aims: The SSE offers flexible investment and capital options, allowing investors with similar missions and visions to connect seamlessly.
  3. Performance-Based Charity: All entities listed on SSI have their performance monitored under strict guidelines overviewed by regulators, encouraging a culture of accountability in performance (social return).
  4. Minimal Registration Cost: The SSE charges minimal fees for registration and listing, reducing costs for both issuers and investors/donors.
  5. Additional Avenue for Social Enterprises: Traditionally, central and state governments have borne the primary responsibility for achieving sustainable development goals. The SSE provides an alternative avenue for raising funds, encouraging new and existing social enterprises.

Instrument of Investment in SSE

  • Zero Coupon Zero Principal (ZCZP) Instrument
    • Issued in dematerialized form only.
    • Issuance modes: Public issue or private placement.
    • Minimum issue size: Rs 50 Lakh.
    • Minimum application size: Rs 10,000.

Enhancing Stakeholder Capabilities

To foster this ecosystem and enhance the capabilities of participating stakeholders, a ten-million-rupee Capacity Building Fund has been established, thanks to contributions made by enterprises like NABARD and SIDBI.

Ensuring Social Impact

To validate social impact, a robust social audit measurement framework and trained social impact assessors are essential. Beyond generating new employment opportunities, establishing a harmonized social audit process is crucial for enhancing transparency and accountability standards within the social sector. In support of this, the National Institute of Securities Markets (NISM) offers a comprehensive training and certification program for social auditors.

By revolutionizing the way social enterprises access funding and ensuring greater accountability, the Social Stock Exchange is set to transform the landscape of social impact investment.

Enjoy Zero Brokerage on Equity Delivery
Enjoy Zero Brokerage on Equity Delivery

Get the link to download the App

Send App Link
Open Free Demat Account!
Enjoy Zero Brokerage on Stock Investments.