Wednesday, October 7, 2009

Sustainable Investment for Sustaining Small Producers

The financial sector holds tremendous growth potential as far as sustainable development of economies is concerned. Sustainable investment opportunities should not only take ethical, environmental and social concerns into consideration but also support the growth of local communities. While millions of investors across the world are investing in green stocks and mutual funds to reap long term benefits, an Indian company named Livelihoods Equity Connect is adopting a different approach to combine development with sustainable investment.

Started by Adarsh Kumar, Livelihoods Equity Connect is focusing on the creation of sustainable companies for sustainable investment instead of looking for existing opportunities. Efforts are being made to build a new venture capital funding model that will serve businesses employing or owned by low income producers. With the help of this fund, the producers can scale up their business and turn into a successful commercial enterprise. Unlike I-bankers or venture capitalists, constantly looking for exit routes, this enterprise plans to create community owned companies, bringing together marginal farmers, dairy farmers, fishermen and craftsmen.
A large and profitable business can be created with the help of collective synergies of low income producers. Even though local farmers and craftsmen in rural India engage in business activities on a daily basis, their income is very low due to the systemic inefficiencies. Livelihoods Equity Connect strives to change this and make them financially independent. Adarsh Kumar had also started the All India Artisans and Craftworkers Welfare Association (AIACA) that helps local craft producers gain market access to increase their income.

There is no doubt that most banks and investors are reluctant in investing their money in community owned companies. But the success of such business organizations forces them to change their mindset and extend their support to the sustainable development of the poor.

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