Lok Capital Group: Searching for inclusive growth


In 2000, with a grant from the Rockefeller Foundation,the Lok Capital Group was founded by Rajiv Lall, Chairman and Vishal Mehta, Partner. The Lok Group works from Delhi and Chennai, and has two arms: Lok Capital and Lok Foundation. The former manages two funds that invest in social enterprises in India. Till date, with $86 million under management, they’ve funded 19 social enterprises as part of their commitment to ‘inclusive growth’. The latter is a charitable trust set up in 2003 to “promote financial and social inclusion, principally in India by means of targeted grants, technical assistance, research and advocacy.”

The context in which Lok Capital Group functions is fairly simple to understand. There seems to be a need to find commercially viable solutions to alleviate the condition of India’s urban and rural poor. This is in light of the failure of various government schemes. Though, to be fair, these failures are largely the result of mismanagement, corruption, inadequate research and lack of professional oversight and assistance. For example, in 2013, The Hindu reported that 83% of the mid-day meals tested in Delhi did not meet the nutritional values set by the Union Ministry of Human Resources Development. This lapse is not necessarily an incrimination against welfare schemes, but how bureaucratic complacency, venality and excesses create gross inefficiencies under the Indian governments patronage, past and present.

There are certain key features Lok looks for in enterprises: transparency, customer-driven approach, focus on client protection and companies whose growth and profitability models align with Lok’s. One of the ways this is done is through creating Social Action Plans (SAP) to audit a “company’s missions, goals, systems, processes, products and outreach.” The primary reason for this social performance audit is to ensure companies can identify and extenuate “operational risks” in the current economically competitive environment.

Some of the companies part of the Lok portfolio are MAS, Rural Shores, Everest Edusys, Jana Lakshmi, Suryoday and Bhartiya Samruddhi, all spread across the subcontinent going back to March 2007 when Lok first began Series A investment in Jana Lakshmi. The companies Lok funds and supports together serve 6.8 million customers of which 64% are reportedly women. These companies provide employment to 16,237 people, 16% of them women. According to Lok, their financial service businesses have disbursed a whopping Rs 405 billion ($6.8 billion) worth of loans since operation, with the 2013 fiscal year disbursements totalling Rs 65 billion ($1.1 billion).

To better understand the nature of companies Lok patrons, we’ve shortlisted four enterprises from their 2013-2014 inclusive growth report.

MAS Financial Services

Established in 1995 by Kamlesh Gandhi and Mukesh Gandhi as a Non-Banking Financial Company (NBFC), MAS has over 2,00,000 MSM enterprise customers across Gujarat, Karnataka, Madhya Pradesh, Maharashtra, New Delhi, Rajasthan and Tamil Nadu. It’s a retail and wholesale financier that deals in housing, two-wheeler and commercial vehicle loans, to name a few.Till date, it’s disbursed a cumulative loan of Rs 46.98 bn through 11,85,429 loans. With over 200,000 retail customers, of which 10.2% are women, it has 73 branches across the country. MAS employs around 1,218 employees (4.3% women), and works with those entrepreneurs and businesspersons who have great difficulty acquiring loans from banks to due varied socio-economic reasons. A glance into their profile reveals men and women who run small business like footwear shops, bhajiyas (snacks), packaging centres and kiranas (retail store). What’s common amongst them is they’ve received multiple loans from MAS, where banks have repeatedly rejected them.

Everest Edusys

Everest Edusys was founded in 2011 by a group of researchers, analysts, educationist and policy makers to create an education system with a scientific bent and encourage critical study by designing progressive learning methodologies. Everest hires 69 employees at the moment, and almost half of them are women. Quest Explore Discover (QED) is their flagship product, which, till date, has mapped more than 500 curricula to help simplify excess of 200 science concepts for students. They currently assist 17 private school customers in the peninsula; are in the process of developing 10 Centers for Science Learning that’ll cater to 2,000+ teachers; and maintain 10 Managed Science Centers in 10 different zonal municipal schools run by Chennai Corporation. The latter benefits more than 200 schools. Their latest product, Science Labs, hopes to enhance classroom learning through digital technology and activity-based science camps. In its 2013-2014 Science Performance survey, Everest noted a 47% improvement in performance over two terms (of 90 students). In 2013, Lok took Everest Edusys under its umbrella.

Hippocampus Learning Centres 

Hippocampus Learning Centres was co-founded by Umesh Malhotra in 2010 in Bengaluru. The aim of starting HLC was to provide underprivileged Indian students with the same learning experience he had when his family moved to California for a year. Today, HLC runs 104 of its low-cost education centres. His research into libraries of government schools led to the establishment of GROWBY, a reading programme to help students learn better, train teachers and enhance reading through activities.What started as an endeavour to help largely slum children has now expanded to benefit rural students, too. In 2012, Lok invested in HLC.

A group of 49, 29% of its employees are women, and it caters to nearly 200 women teachers. HLC develops after-school primary education programmes, kindergarten activities and in-house curricula. Of the 2,850 kindergarten students HLC benefits, 91% were able to read and 89% were able to do simple addition after intervention. One of their after-school programmes is the Mathstar, inspired by Japan’s Kumon, the world’s largest after-school math and reading programme. The second one is Grow By Reading+ (GRB+) that aims to improve English language fluency. Currently, these programmes cater to students of Class I to IV, but seeing as how deplorable the state of education is in India, students from up to Class VII are also eligible. Mathstar is available in 17 villages for 783 students, whereas GBR+ is held in 33 villages for 882 students.

Drishti Low cost eye care

72% of Indians reside in rural areas. But, 90% of ophthalmologists work in urban areas. That leaves a meagre number of eye care specialists catering to millions of Indians. Kiran Anandampillai and his wife, Anjali, decided to give to the community by getting into the telemedicine industry. Most Indians have very poor access to primary healthcare, and when Kiran and Anjali met Dr Rajesh Babu, an ophthalmologist who highlighted India’s ‘blindness problem’, they began work to establish Drishti, a low-cost eye care service, in Karnataka. In December 2011, Drishti began the gruelling work of giving rural India access to eye care. In the course of their 2014 fiscal year, they’ve served nearly 25,000 patients, of these 10,000 are women, a group that has even less access to any kind of healthcare. They have 21 employees, with 8 women on the staff. They received their Lok investment in 2012, less than a year into their work. Their first vision centre was established in Devanahalli, and 88% of their surgeries are conducted free of cost, with Rs 1,000 paid by grants to cover surgery costs. The price of paid surgeries tops at Rs 6,000. A new addition to their works is the Drishti Mobile Camp. The Camp is a 50-seater bus fully equipped to address on-the-go eye care needs of villagers across the state. Drishti runs 24 camps a month, helping an average of 150 patients per camp. It takes a lot of measures to ensure it’s up to NABH standards. Drishti Devanahalli has its own Operation Theatre, besides the Drishti School of Optometry, which provides a one-year assistant training programme. Of the 6 students in their first batch, 4 passed and are currently employed by Drishti.

These are only a handful of the kind of impact-generating organisations Lok has helped support and invest in over the course of its work in India. The Lok Capital Fellowship Program, on the other hand, helps talented, young professionals work with their investee companies over a 12-18 month period to provide consultancy, analysis, research and advice as part of their mentor-support principle.

For eight years now, Lok has been largely funding social enterprises in India. The very basis of its undertaking is to expand impact beyond financial inclusion, and to support enterprises that develop products and services suited for small rural communities, many of whom make for low-income customers. This inclusion needs to go beyond just a financial one and incorporate health, education and social inclusion. Enterprises that enable this kind of holistic development are the ones The Lok Group is most interested in, as they might just be the future of the Indian nation.


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