The Securities and Exchange Board of India has reduced the minimum investment threshold for social impact funds from Rs 2 lakh to Rs 1,000, a move aimed at attracting retail investors to the Social Stock Exchange (SSE), the Business Standard reported .

The revised norms, notified on 16 April, bring the minimum application size for Zero Coupon Zero Principal (ZCZP) instruments under SEBI's ICDR regulations in line with the new lower limit for social impact funds.

Until now, participating in social impact investing required a commitment of at least Rs 2 lakh under Alternative Investment Fund (AIF) rules, effectively keeping most retail investors out.

The revised framework allows anyone to contribute as little as Rs 1,000 toward verified social projects listed on a regulated platform.

However, these instruments differ fundamentally from conventional investments. ZCZP instruments do not offer financial returns.

They are structured to channel funds toward non-profit organisations working on social causes, functioning more as a regulated and transparent form of giving than a wealth-building tool.

Sebi has also eased fundraising conditions for social enterprises. The minimum subscription requirement for social projects has been lowered from 75 per cent to 50 per cent, improving the likelihood that funds raised actually get deployed.

Non-profit organisations listed on the SSE will now be permitted to remain listed for up to three years without raising fresh capital, giving them a longer runway to develop credible initiatives.