Target population

The target population is who a social enterprise works for.

For the Social Stock Exchange it is not enough to do good work. The ICDR eligibility criteria say the enterprise must target underserved or less privileged population segments, or regions recording lower performance in the development priorities of the Central or State Governments, or other target segments SEBI may specify.

So there are two ways to qualify: people who are underserved, or places that lag behind on development priorities. A school in a prosperous suburb doing an eligible activity (education) still fails this limb if the children it serves are not underserved and the region is not lagging.

The target population is also the yardstick for everything that follows. The 67% predominance test for For Profit Social Enterprises is measured against it. Later, the Social Impact Assessor asks whether the project was relevant to the target population's needs and whether its benefits will last for them.

Where it sits in eligibility. Primacy of social intent has several limbs: (a) at least one of the 18 eligible activities; (b) serving the target population; (c) for FPSEs only, the 67% predominance test; and (d) the excluded categories (corporate foundations, political or religious organisations or activities, professional or trade associations, and infrastructure and housing companies except affordable housing).

Who counts (Chapter 3, 3.1.1). Services or products for members of Scheduled Castes, Scheduled Tribes, Other Backward Classes, people with special needs, the elderly, children, at-risk adolescents, migrants and displaced persons may fall in this category.

Classified by social intent (Chapter 2, 2.2.8). The workbook calls communities and target groups the primary stakeholder of the SSE. It classifies them by the social intent the enterprise pursues: hunger and poverty, health and sanitation, education and livelihoods, gender equality, environment, heritage, sport, supporting incubators, and so on.

The 67% test runs on it. An FPSE qualifies if at least 67% of its activities serve the target population, shown by any one of:

In the assessment (Chapter 5). Two of the evaluation criteria name it. Relevance asks whether the initiative's objectives align with the identified needs and priorities of the target population. Sustainability asks whether impacts will keep benefiting the target population after the intervention or funding ends. Inclusiveness asks whether the poorest and most marginalised can access the benefits. Chapter 7 adds that a positive performance trend implies the target population is being positively impacted.

An illustrative FPSE; figures are made up.

Krishi Mitra Agritech Pvt Ltd sells low-cost drip-irrigation kits. It serves small and marginal farmers in drought-prone districts of Marathwada, and also sells premium kits to large commercial orchards near Pune.

Its 3-year average figures:

Revenue test: 4.2 ÷ 6.0 = 70%, at least 67%. Passes.

Expenditure test: 3.6 ÷ 5.5 ≈ 65.5%, below 67%. Fails, but that does not matter: passing any one measure is enough.

The company also meets limb (a), because promoting livelihoods, including enhancing the income of small and marginal farmers, is an eligible activity. It falls in no excluded category, so it can be identified as a social enterprise.

Two years later, its Social Impact Assessor tests relevance: did farmers help shape the kit design and the success indicators? The assessor also tests sustainability: will farmers keep using the kits once the subsidised service visits end? Both questions are asked about the same target population the company named at registration.

Chapter 1 (10% weightage) sets out the ICDR criteria, including the target-population limb and the three 67% measures. Chapter 2 (10%) treats communities and target groups as the SSE's primary stakeholder. Chapter 3 (6%) repeats the limb as a registration condition and gives the SC/ST/OBC/elderly/children/migrants examples. Chapter 5 (10%) uses the target population in the relevance and sustainability criteria, and Chapter 7 (11%) links positive performance trends to it. Expect "which of these is not a valid target population?" and 67% calculations.

• People or places. Underserved population segments qualify, and so do regions recording lower performance on Central or State development priorities.
• An eligible activity is not enough by itself. An education project for well-off children does an eligible activity but misses this limb.
• 67% is for FPSEs only. An NPO must serve a target population but faces no percentage test.
• Any one measure, not all three. Revenue, expenditure or customer base, each on the immediately preceding 3-year average, not the last year alone.
• The list of examples is not closed. SC, ST, OBC, people with special needs, the elderly, children, at-risk adolescents, migrants and displaced persons are examples, and SEBI may specify other target segments.
• Relevance vs sustainability. Relevance is about fit with the target population's needs. Sustainability is about benefits continuing after funding ends.