MICROCAPITAL BRIEF: Fusion Microfinance Raises $24m in Equity from Creation Investments, GAWA, BIO, Oikocredit as Incofin Exits

Fusion Microfinance Private Limited, an Indian non-banking financial company, has raised the equivalent of USD 24 million in its latest funding effort. This round was led by Creation Investments Capital Management Limited Liability Corporation (LLC), a US-based alternative investment company seeking to alleviate poverty by supporting economic development. Incumbent investors Oikocredit and the Belgian Investment Company (also known by its Dutch acronym BIO) also participated, as well as new investor Gawa, a Spain-based company focusing on microfinance. The new investments have enabled the partial exit of Incofin Investment Management, a private Belgian company that first invested in Fusion Microfinance in June 2010 in the amount of INR 4.5 crore (USD 6.7 million). The individual prices involved and sizes of the stakes exchanged have not been released.

As of July 2016, Fusion reported a gross loan portfolio of INR 700 crore (USD 105 million) and 526,000 active borrowers. It does not accept deposits. As of 2016, Creation Investments reported that its investees hold an aggregate gross loan portfolio of USD 4.5 billion and serve 9 million entrepreneurs. As of 2015, Incofin has USD 725 million assets under management, and its investees serve 3 million entrepreneurs. As of 2016, Gawa has USD 60 million in assets under management. As of 2015, Oikocredit has a portfolio valued at EUR 735 million (USD 829 million), 544 microfinance partners and placements in 69 countries.

By Petra Barbu, Research Associate

About Fusion Microfinance Private Limited

Fusion Microfinance Private Limited is a non-banking financial company that was founded in 2010 and serves 11 Indian states. The organization’s vision is “to provide underprivileged women with economic opportunities.” During its first year of existence, Fusion acquired the microfinance division of Aajeevika, an Indian nonprofit. Fusion offers loans with terms of 1.5 to 2 years in sizes ranging from INR 12,000 (USD 180) to INR 30,000 (USD 450) through a network of 197 branches. As of July 2016, Fusion reported a gross loan portfolio INR 700 crore (USD 105 million) and 526,000 active borrowers. It does not accept deposits.

About Creation Investments Capital Management Limited Liability Corporation (LLC)

Creation Investments Capital Management Limited Liability Corporation is an alternative investment management company whose mission is to alleviate global poverty by making direct, for-profit investments in organizations that engage in economic development. The company is headquartered in Chicago in the US state of Illinois. Creation Investments manages three primary financial inclusion funds with an approximate total of USD 275 million in committed capital plus USD 50 million in other direct investments as of 2016. Its investees hold an aggregate gross loan portfolio of approximately USD 4.5 billion and serve 9 million entrepreneurs in 13 countries.

About Incofin Investment Management

Incofin Investment Management is a private, limited liability company based in Belgium that manages funds investing in microfinance institutions (MFIs) in developing countries. It focuses on rural areas, especially providing financial services for those who are active in the agricultural sector. Incofin’s funds include Incofin CVSO, Impulse Microfinance Investment Fund, Fairtrade Access Fund, Rural Impulse Funds I and II, VDK Loan Portfolio, Belgian Investment Company account, and Volksvermogen. As of 2015, Incofin has USD 725 in million assets under management and its investees serve 3 million entrepreneurs.

About Gawa Capital Partners

Gawa Capital Partners is a Spain-based investment advisory company specializing in microfinance. Founded in 2009 by Agustin Victoria and Luca Torre, Gawa historically has made investments ranging from EUR 1 million (USD 1.25 million) to EUR 3.5 million (USD 4.37 million). As of 2016, it has USD 60 million in assets under management.

About Oikocredit

Oikocredit is a Dutch cooperative investment fund comprised of church groups, cooperatives and individual investors. Established in 1975, it works in 70 countries, investing mainly in microfinance institutions (MFIs) as well as trade cooperatives, fair trade organizations, and small and medium-sized enterprises (SMEs) in the developing world. As of 2015, Oikocredit has a total portfolio under management of EUR 735 million (USD 829 million), 809 partners in 69 countries including 544 microfinance partners.

Sources and Additional Resources

[1] Information provided directly to MicroCapital by Incofin

[2] MicroCapital Universe: Fusion Microfinance

[3] MicroCapital Universe: Creation Investments

[4] MicroCapital Universe: Incofin Investment Management

[5] MicroCapital Universe: Gawa

[6] MicroCapital Universe: Oikocredit

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