Amplifying Impact: The Multiplier Effect of Returnable Grants in Financial and Social Transformation

Returnable Grants (RGs) have revolutionized the landscape of financing and social impact, providing leverage from a funding perspective while creating a multiplier effect for participants that drives positive change. The RG with its unique zero-interest, zero-collateral, no legal obligation to repay has the potential to become a catalysing tool that can empowering individuals and businesses that were previously deemed “ineligible” or “high-risk” to access formal credit.

Since 2021, our experience with the RG has shown success and scalability across various communities:

  • Over 32,000+ participants have already been impacted
  • Outstanding overall repayment rate of 93%.
  • More than 50% of these participants are women, emphasizing the role of RGs in promoting gender equality and empowering marginalized groups.

In this blog, we will explore the transformative potential of RGs and how they have garnered support from leading donors – corporate and philanthropic – to create a ripple effect leading to sustainable change for the communities they serve.

Driving Leverage from Funding and Financial Perspectives

RGs have captured the attention from corporate and philanthropic donors due to their ability to mobilise additional capital and maximize the reach and effectiveness of financial support. This ‘leverage’ expands the pool of resources,  bridges funding gaps. As RGs are repaid, the funds can be recycled and reinvested, creating a sustainable funding cycle that perpetuates the impact over time. Additionally, RGs can complement larger-scale initiatives, multiplying their impact through the integration of financial resources.

Creating a Multiplier Effect for Lasting Impact

The multiplier effect of RGs goes beyond the immediate participant group. By supporting micro-entrepreneurs access capital, RGs can stimulate local economies, generate employment opportunities, and contribute to community development. As these businesses flourish and incomes increase for the microentrepreneur, they are able to expand their business and create more employment opportunities leading to overall economic growth in their community – demonstrating the transformative potential of RGs in addressing socio-economic challenges and fostering sustainable development. Several successful cohorts have witnessed multiplier effects of 2-3x, indicating the power of RGs when supported by the right partners and infrastructure.

Examples of Donor Support for Returnable Grants

Returnable Grants have garnered significant attention and support from  donors who recognize the transformative power of the RG and have actively supported their implementation across various stakeholder groups. For instance:

  • Vinati Organics where over 4000 people got the RG at 100% repayment rate
  • Arvind Ltd has supported 297 blue-collar workers, providing RGs to enhance their livelihoods and create economic opportunities.
  • S&P Global has targeted 1920 street vendors and artisans, enabling them to thrive through RG support.
  • Godrej has focused on empowering 692 beauty entrepreneurs, fostering their growth through RG investments



These initiatives have been able to demonstrate the tangible benefits of RGs in transforming communities, promoting gender equality, revitalizing rural economies, preserving
traditional crafts, and improving livelihoods. Moreover, RGs provide a sustainable funding cycle, as they can be recycled and reinvested into new cohorts, ensuring a continuous flow of capital for long-term impact amplifying the effectiveness of their philanthropic efforts.

Towards Institutionalization and Financial Inclusion

To further enhance financial inclusion, efforts are underway to institutionalize RGs as a viable alternative for improving livelihoods. Collaborations with regulators and financial institutions aim to link RGs with pre-credit scores and a credit guarantee to providing access to formal credit for high-risk individuals who would otherwise be excluded. By leveraging RG repayment rates to build pre-credit scores, participants’ creditworthiness is enhanced, opening doors to the formal economy. This integration fosters sustainable economic growth and development, benefiting both individuals and the larger community.

Returnable Grants offer a unique approach to funding and financial inclusion, providing leverage and driving a multiplier effect of impact. As the momentum behind RGs continues to grow, we see potential to enhance the way we address social challenges, paving the way for a future where finance empowerment becomes a force for positive change and where everyone has the opportunity to thrive.