The Institute for Financial Management and Research (IFMR) Investment Managers, a unit of India-based IFMR Trust Group providing investment management services in asset classes that impact the financially excluded, is seeking to raise INR 1 billion (USD 15 million) for a debt fund called IFMR FImpact Medium Term Microfinance Fund to invest exclusively in microfinance firms. The fund, which was registered in February with the Securities Exchange Board of India (SEBI) as a Category II alternative investment fund, would have a tenure of 3.5 years. The fund will focus primarily in investing in debt, although it is slated to allocate a portion to purchasing preferred shares. As of July 2016, the fund has made debt investments in two microfinance firms, Rashtriya Gramin Vikas Nidhi (RGVN) North East Microfinance Limited in the amount of INR 150 million (USD 2.3 million) and Intrepid Finance & Leasing Private Limited in the amount of INR 100 million (USD 1.5 million), both for a period of 37 months.
According to a statement from IFMR Trust Group’s IFMR Investment Fund, “the current sources of funding are skewed heavily towards secured short-term funding” in the microfinance industry in India. This fund along with the organization’s other two funds, both of which have tenures of six years, are intended to address this imbalance. The six-year funds have a combined asset size of INR 3.5 billion (USD 53 million) [1].
By Sharanya Madhavan, Research Associate
About IFMR Investment Managers:
Incorporated in February 2014, IFMR Investment Managers Private Limited (IFMR Investments) is the asset management arm of the nonprofit, India-based IFMR Trust Group. The company’s objective is to promote and manage investment funds that offer funding to organizations that serve people who had previously depended on informal financial channels. The organization’s first facility, IFMR FImpact Investment Fund, was launched in June 2014 in the amount of INR 1 billion (USD 15 million) to invest in microfinance firms for six years. Its second fund, IFMR FImpact Long Term Multi Asset Class Fund, was initiated in January 2016 with INR 2.5 billion (USD 38 million) to invest in microfinance, affordable housing, agri-business and small business loans. As of July 2016, the firm was seeking to raise INR 1 billion (USD 15 million) for its third fund, IFMR FImpact Medium Term Microfinance Fund, to invest in microfinance firms.
Sources and Additional Resources
[1] Livemint: IFMR arm raising Rs100 crore to invest in microfinance businesses
MicroCapital Universe: IFMR Trust Group
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