MICROCAPITAL BRIEF: IFMR Holdings Raises $25m from Accion, LeapFrog, Lok Capital to Accelerate Financial Inclusion in India

IFMR Holdings, an arm of Indian nonprofit IFMR Trust, recently raised USD 25 million from Accion, a US-based nonprofit organization; LeapFrog Investments, a for-profit private equity fund based in Mauritius; and Lok Capital, an India-based microfinance investment vehicle. Accion invested USD 12.5 million, LeapFrog disbursed USD 9 million and USD 3.5 million was funded by Lok Capital.

IFMR Holdings operates via three entities: IFMR Capital, “a debt capital markets platform offering micro-loans, small business finance, affordable housing and commercial vehicles finance” [1]; IFMR Rural Finance, which develops financial and technology product solutions for financially excluded areas; and IFMR Rural Channels, which provides loans, insurance products and pension funds in rural India.

As of March 2013, IFMR Trust reported total assets of INR 1.5 billion (USD 25.5 million).

By Caroline Zhu, Research Associate

About IFMR

Established in 2006, Institute for Financial Management and Research Trust (IFMR Trust) is a nonprofit organization in India. Its mission is to “ensure that every individual and every enterprise has complete access to financial services.” As of August 2015, IFMR Trust carries out its mission through the following companies acquired or incubated by the Trust: IFMR Finance Foundation, IFMR Holdings, IFMR Capital, IFMR Rural Finance, IFMR Rural Channels and IFMR Investments. As of March 31, 2013, IFMR Trust reported total assets of INR 1.5 billion (USD 25.5 million). More recent financial information on the organization is unavailable.

About Accion

Accion is a private, US-based nonprofit organization with the mission of alleviating poverty by offering financial products such as microenterprise loans and business training. Accion was founded in 1961 and issued its first microloan in 1973 in Brazil. Accion’s partner microfinance institutions provide loans to men and women entrepreneurs through 64 microfinance institutions (MFIs) in 32 countries in Africa, the Americas and Asia. As of March 2015, Accion, in association with its partner MFIs, has an active loan portfolio of USD 7.54 billion that serves approximately 5.33 million borrowers. As of December 2013, Accion reported total assets of USD 351 million.

About LeapFrog Investments

LeapFrog Investments, which was founded in 2007 by Dr Andrew Kuper and Dr Jim Roth, is a Mauritius-based for-profit private equity fund that invests in emerging markets. LeapFrog’s investors include the Luxembourg-based European Investment Bank, the US-based social investment firm Omidyar Network, the Dutch development bank Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden (FMO), US-based nonprofit microfinance network Accion, US-based nonprofit Calvert Foundation, the World Bank Group’s private investment arm the International Finance Corporation (IFC), German development bank Kreditanstalt fur Wiederaufbau (KfW) Bankengruppe, Bermuda-based global reinsurer Flagstone Reinsurance and the US-based nonprofit Soros Economic Development Fund. LeapFrog team members have also committed USD 1 million of their personal money to the fund. The fund focuses on ventures in Africa and Asia, with initial target countries including Ghana, India, Indonesia, Kenya, Pakistan, the Philippines and South Africa. In 2013, LeapFrog announced that it closed an equity fund after raising USD 200 million. Further financial information on the organization is unavailable.

About Lok Capital

Lok Capital LLC is a microfinance investment vehicle that is part of the Lok Capital initiative, which was founded in 2000 with support from the US-based nonprofit Rockefeller Foundation. Its goal is to support the development of social enterprises to deliver basic services in a commercially viable manner. The initiative is comprised of Lok Capital, a Mauritius-based venture capital fund that places equity and equity-linked investments in microfinance institutions (MFIs) and social enterprises in the education, healthcare and “livelihoods” sectors; and the Lok Foundation, a nonprofit entity that provides “specialized funding and long-term technical assistance for financial and social inclusion.” Lok Capital makes its investments through two funds, Lok Capital I and II. Lok Capital I was launched in 2006 with USD 22 million in investments from Accion, The Commonwealth Development Corporation (CDC), Développement international Desjardins, Netherlands Development Finance Company (also known by its Dutch acronym FMO), International Finance Corporation (IFC), Kreditanstalt für Wiederaufbau (KfW) and responsAbility Social Investments. The fund’s investments generally range in size from USD 500,000 to USD 3 million. Lok Capital II was closed in 2012 with USD 65 million. Its investors included previous Lok investors IFC, CDC, KfW, FMO and responsAbility along with new investors Proparco and ASN Novib. Further financial information on the organization is unavailable.

Sources and Additional Resources:
[1] Accion press release, “India’s Financial inclusion leader IFMR Holdings raises $25m from Accion, LeapFrog and Lok”, https://www.accion.org/content/india%E2%80%99s-financial-inclusion-leader-ifmr-holdings-raises-25m-accion-leapfrog-and-lok

MicroCapital Universe Profile: Accion

MicroCapital Universe Profile: IFMR Trust Group

MicroCapital Universe Profile: LeapFrog Investments

MicroCapital Universe Profile: Lok Capital LLC

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