The Institute for Financial Management and Research (IFMR) Trust of India is to establish a USD 40 million investment vehicle called the Microfinance Classic Fund to provide funding to early-stage microfinance institutions (MFIs). A group of investors including ICICI Bank, India’s second-largest bank with total assets of USD 79 billion, is supporting the IFMR Trust with the initiative. The fund will have both domestic and offshore fund status and it will be registered overseas to facilitate investments from international institutions.
The IFMR Trust, which is affiliated to the Institute for Financial Management and Research Business School in Chennai, was launched in October 2006 with the aim of promoting a network of enterprises that offer the poor a platform to engage with the markets as producers and consumers of goods and services.
The Microfinance Classic Fund will only be funding early-stage MFIs, according to Puneet Gupta, COO, IFMR Trust, unlike existing microfinance funds such as Bellwether and Aavishkaar that invest in established MFIs. Mr Gupta added that as most MFIs are more focused in the southern region of India, the new fund will help entrepreneurs in other regions where microfinance is not so readily available.
The Classic Fund is being launched simultaneously with the IFMR Trust’s USD 100 million Network Enterprise Fund, which is designed to support new businesses in priority sectors in India, such as food processing, dairy, rural tourism, waste management and skills training.
Amy Rennison, MicroCapital writer
Additional Sources:
Microfinance Gateway:
http://www.microfinancegateway.org/content/article/detail/44231
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