MICROCAPITAL BRIEF: Indian Microfinance Funds Seek to Expand Focus Beyond Microcredit

According to a recent article on VCCircle.com, an Indian online news platform, Indian microfinance fund managers are diversifying their investment base to include more areas of social investing, such as microinsurance, micro housing finance, healthcare, mobile payments and rural supply chains.

“Our role is to catalyse new products and services which have a fundamental impact as far as poor communities are concerned. Since we want to look at the impact side, we are actively looking for investments in teams outside of credit,” said Mr Sandeep Farias, managing director at Elevar Equity, a Bangalore-based investment management company.

Other key players looking to broaden their focus beyond microcredit include Aavishkaar Venture Management Services, the India Financial Inclusion Fund (IFIF) and Lok Advisory Services. The article suggests that “by broadening their investments, [these] MFI funds could be looking at diversifying possible risk from a concentrated credit portfolio.”

By Stefanie Rubin, Research Assistant

About Elevar Equity Advisors Private Limited:

Elevar is a Bangalore-based investment house focused on the underserved four billion at the base of the pyramid in developing countries. The organization makes equity capital available to entrepreneurs providing microfinance, financial and other services to customers in emerging markets. Elevar has total assets under management of USD 170 million.

About: India Financial Inclusion Fund

The India Financial Inclusion Fund (IFIF) is an offshore fund based in Mauritius that focuses on equity investments in microfinance institutions (MFIs) and other providers of financial services to the poor such as low-cost housing providers and technology companies in the microfinance industry. The fund is advised by Caspian Advisors Private Limited, an investment management company that specializes in microfinance investment funds. IFIF also provides technical advice and risk capital.

About Lok Capital LLC:

Lok Capital LLC is a limited-life, limited-liability company based in Mauritius that provides equity and equity-linked investments to microfinance institutions (MFIs) in India. The fund was launched in 2006 with USD 22 million. Investors include ACCION International, Commonwealth Development Corporation (CDC), Developpement International Desjardins, Netherlands Development Company (FMO), International Finance Corporation (IFC), KfW, and responsAbility. The average investment size ranges from USD 500,000 to USD 3 million. The Lok Foundation was created along with Lok Capital LLC to provide specialized technical assistance to Indian MFIs.

Additional Resources:

MicroCapital Universe: Elevar Equity II: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Elevar+Equity+II

MicroCapital Universe: Lok Capital LLC: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+Capital+LLC

MicroCapital Universe: Aavishkaar Goodwell India Microfinance Development Company Ltd: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Aavishkaar+Goodwell+India+Microfinance+Development+Company+Ltd

MICROCAPITAL BRIEF: Elevar Equity, a Bangalore-based Private Equity Fund, Raises $70m for Microfinance-focused Fund for Investments in India, Mexico, the Philippines and Peru: https://www.microcapital.org/microcapital-brief-elevar-equity-a-bangalore-based-private-equity-fund-raises-70m-for-microfinance-focused-fund-for-investments-in-india-mexico-the-philippines-and-peru/

MICROCAPITAL BRIEF: India Financial Inclusion Fund (IFIF) Raises USD 90m in 15 Months for Microfinance Investments: https://www.microcapital.org/microcapital-brief-india-financial-inclusion-fund-ifif-raises-usd-90-million-in-15-months-for-microfinance-investments/