Impact investments, a select line of social funding that caters to the bottom of the pyramid, are moving India?s social network in a big way.

Businesses creating opportunities for the disadvantaged in areas such as financial inclusion, education and health and philanthropic activities have managed to keep investors engaged even in a slow moving year. Data from research firm Venture Intelligence shows that in the last two years, social-impact enterprises in the country attracted funding of $394 million across 89 deals.

Last year, some of the top deals included a $27-million investment into Equitas Micro Finance India by IFC, India Financial Inclusion Fund and MicroVentures, while Ujjivan Financial Services raised $25.5 million from Sequoia Capital India, Wolfensohn & Co, Lok Capital, India Financial Inclusion Fund and others.

In January, Rockefeller Foundation and philanthropic investment firm Omidyar Network along with Mumbai-based strategic philanthropy foundation Dasra launched an Impact Economy Innovations Grant Fund of $800,000, which aims to develop the overall ecosystem of social-business model in India.

?Impact investment has taken off in a very big way in India in the last few years. India is the epicentre of impact investing and we have eight to ten funds that are active here,? Jayant Sinha, partner and MD, Omidyar Network India Advisors, told FE. ?In a way, the future of the impact investing industry globally is going to be established here.?

Omidyar is looking at investing up to $200 million in profitable and non-profit ventures across the country in the next three to five years.

The firm started by eBay founder Pierre Omidyar has invested $113 million in India so far since it started funding in 2010.

Last year, Motilal Oswal Private Equity announced plans to raise a new impact investment fund with a capital of up to R300 crore, which will focus on socially relevant business models.

Acumen Fund, which has been investing in the country since 2001, with seed capital from Rockefeller Foundation, Cisco Systems Foundation and three individual philanthropists, has invested $21.6 million as of November 2011. Among the other international and domestic funds involved in impact investing include Aavishkaar, Acumen, International Finance Corporation, Lok Capital, India Financial Inclusion Fund, Grassroots and Elevar.

Experts point that there is no dearth of capital globally to fund social-impact models.

JP Morgan and Global Impact Investing Network estimated that in the current decade, impact investments in the developing world would grow to between $400 billion to $1 trillion worth of capital. Besides, the list of Indian corporate bigwigs who have committed part of their wealth for philanthropic causes, has only grown bigger. Early this month, PNC Menon, the founder of real estate firm Sobha Developers, pledged to give half of his personal wealth, estimated at $600 million, to charity.

Menon, a first-generation entrepreneur, follows the likes of IT czar Azim Premji and chairman of GMR Group GM Rao who have pledged their wealth for social causes in recent years.

Nandan Nilekani, the unique identification authority of India (UIDAI) chairman who endorses chequebook philanthropy, feels it is not transactional philanthropy that matters, but intellectual and strategic philanthropy. ?Indian philanthropy is restricted to a few things we need to look at the bigger picture,? he said at a recent conference in Bangalore.

Premji transferred 295.5 million equity shares of Wipro worth R12,300 crore held by certain entities controlled by him to an irrevocable trust. In 2011, Rao pledged his personal share of the entire business owned by the family, which was estimated R1,540 crore at that time, to create an endowment for the group’s social activities arm, GMR Varalakshmi Foundation.

Sinha of Omidyar points that trillions of dollars are available globally from HNIs, development finance institutions and philanthropists. ?There is capital that wants to make a social impact. We are just at the start of that and India is at the vanguard of it.?

Some, however, feel the missing link in this space is robust policy. ?Our policies are still not open to private solutions. There is no support for inclusion. The mindset has not changed towards private participation in social initiatives,? said Vishal Mehta, co-founder and partner, Lok Capital, a venture capital firm.

This year, Lok Capital invested an undisclosed amount in Drishti, a social enterprise providing eye care to underserved populations. It has also invested R20 crore in Suryoday Microfinance.