EDA CapitalConnect: An Online Platform for Social Enterprise Financing

Background

EDACC was conceived by Director and Founder of EDA Rural Systems, Mr. Sanjay Sinha. In 1983, Sinha established EDA Rural Systems as a development sector consultancy, research and capacity-building organization. Through its trainings and academic publications, EDA Rural Systems became well-known in the development sector and in Asia’s microfinance sector in particular. As the sector grew, Sinha observed that there was a pressing need to improve the availability and flow of information between microfinance institutions (MFIs) and other industry stakeholders, which he believed could reduce the information asymmetry in the market for capital.⁴ From this observation and the success of EDA Rural, Sinha and his team launched Micro-Credit Ratings International Limited, (M-CRIL), which developed and implemented the concept of producing credit ratings of MFIs. In addition to a review of financial performance, these ratings include a risk assessment, projections of future performance, and recommendations for investment. Over its first decade of operations, M-CRIL expanded its services in terms of the number of MFIs rated and the quantity of funds channeled to MFIs. In 2005, EDA pioneered the assessment of the effectiveness of MFIs’ systems and services for the achievement of its social objectives by developing the first social rating tool for MFIs (Sinha F., 2006).