Lok Capital LLC, a Mauritius-based microfinance investment vehicle, and its Proparco, a French development finance institution, have recently invested INR 260 million (USD 5 million) in equity in the Institute for Financial Management and Research (IFMR) Rural Channels and Services, a company of IFMR Trust that provides financial services in rural India. IFMR reportedly plans to use the funding, which is the first equity investment it has received, to expand its subsidiary non-bank finance company Kshetriya Gramin Financial Services (KGFS). KGFS offers services including loans, insurance, pensions, savings, remittances and investment products. The size of the stakes that Lok and Proparco will take has not been disclosed.
This investment is one of several venture capital investments that have been made so far this year in India’s social enterprise sphere. Other investments include Omidyar Network, a US-based investment firm, investing an undisclosed amount in EnglishHelper, a company that assists people learning English as a foreign language, and Sequoia Capital, a US-based investment firm, making an investment of USD 7.5 million in Edusys Services, an education training provider.
By Charlotte Newman, Research Associate
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. It consists of a venture capital fund, Lok I, and the Lok Foundation. Lok I was launched in 2006 with USD 22 million in investments from Accion, The Commonwealth Development Corporation (CDC), Developement International Desjardins, Netherlands Development Company (FMO), International Finance Corporation (IFC), Kreditanstalt für Wiederaufbau (KfW) and responsibility Social Investments. The fund’s investments generally range in size from USD 500,000 to USD 3 million. Lok II was closed in 2012 with USD 65 million. Investors included previous investors IFC, CDC, KfW, FMO and responsAbility along with new investors Proparco and ASN Novib. The Lok Foundation provides technical assistance to Indian MFIs.
About Proparco
Established in 1977, Société de Promotion et de Participation pour La Coopération Economique (PROPARCO – The Investment and Promotions Company for Economic Cooperation) is a development finance institution based in Paris, France, that is jointly held by the Agence Francaise de Developpement (AFD), a development finance institution of the French government, and private shareholders. PROPARCO’s mission is “to be a catalyst for private investment in developing countries which targets growth, sustainable development and reaching the United Nations’ Millennium Development Goals (MDGs).” In 2010, PROPARCO disbursed EUR 2.1 billion (USD 2.7 billion) for 70 projects in 28 countries.
Sources and Additional Resources:
The Economic Times: “Lok Capital, Partner Invest 26 Crore in IFMR Rural Channels,” http://articles.economictimes.indiatimes.com/2012-03-30/news/31261007_1_venture-capital-firms-lok-capital-investment-firm
MicroCapital.org story, February 6, 2012, “MICROCAPITAL BRIEF: Indian Microfinance Institution Ujjivan Financial Services Raises $25m in Equity from FMO, Wolfensohn, LOK, IFIF, Sequoia, Unitus, Elevar,” https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-ujjivan-financial-services-raises-25m-in-equity-from-fmo-wolfensohn-lok-ifif-sequoia-unitus-elevar/
MicroCapital.org story, February 10, 2012, “MICROCAPITAL BRIEF: Lok Capital Closes Venture Fund, Lok II, at $65m,” https://www.microcapital.org/microcapital-brief-lok-capital-closes-venture-fund-lok-ii-at-65m/
MicroCapital Universe Profile: Lok Capital LLC
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+Capital+LLC
MicroCapital Universe Profile: Proparco
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=PROPARCO
MicroCapital Universe Profile: Omidyar Network
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Omidyar+Network
MicroCapital Universe Profile: Sequoia Capital
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sequoia+Capital
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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