Varhad’s Dalit Fund — Playing by green, social, rules

The Varhad Group, the entity managing India’s first Dalit Fund, has become a signatory to the United Nation’s Principle of Socially Responsible Investment (UNPRI). Varhad is the second India-headquartered private equity/asset manager group after IDFC to achieve this distinction and one of 150 general partners in the world.

Being a signatory to the UN principle would mean that funds will be provided only to companies that strictly follow three principles — environmental, social and governance. The environmental principle entails working toward a sustainable environment in addition to compliance with pollution guidelines. The social principle would mean being considerate to the community around a plant and consumers, while taking care of employees.

Governance mainly refers to compliance with all the rules and regulations of the land, to prevent corrupt practices.

“In order to bring good governance practices and curb corruption, one of the conditions is that companies getting funds from us will not be allowed to make payments over ₹20,000 in cash/bearer cheques,” Varhad Group’s founder and Managing Director, Prasad Dahapute, told Business Line .

 Prasad, who has worked with financial institutions such as HSBC and Standard Chartered, said all the three missions of the group had been brought under UNPRI. These missions include poverty alleviation of 25,000 people through a Dalit Chamber of Commerce and Industry SME Fund, anti- poverty mission for one lakh poor through SGB (Small and Growing Businesses) bonds and economic empowerment of one lakh women through SGBs. It may be noted that the DICCI SME Fund was launched last year by Finance Minister P Chidambaram with the aim to raise ₹500 crore over 10 years and finance Dalit entrepreneurs.  

 “All three missions together cover 22.5 per cent of our vision,” Prasad said, adding that the aim was to raise one million (10 lakh) Indians above poverty by 2023. This will be possible through direct and indirect employment and sustainable livelihood, besides investing and nurturing 1,000 SGBs. 

“Our effort would be to ensure $5 a day or ₹9,000 a month for targeted individuals. This is above the World Bank’s threshold of poverty at $4 a day to mark those below the poverty line,” he said.

 On the Women Empowerment Mission, Prasad said the plan was to invest more than $400 million or ₹2,400 crore over 10 years to economically empower one lakh women through 100 SGBs. This will include learn while earning, direct and indirect employment with SGBs, skill development and motivation.

“We want to not just create entrepreneurship, but also develop and promote local brands to challenge multinationals, like what Ghari detergent (from Kanpur, Uttar Pradesh) did to MNC brand such as Rin and Surf,” he said. Such brands not only create wealth for SGBs but also provide sustainable livelihood to women.

 Prasad said the Fund would focus on four women-intensive sectors — garments and accessories, basic utilities, agriculture & processing and food products.

The group has already launched a pilot project in Maharashtra and hopes to go full swing by October.

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