The Switzerland-based firm responsAbility Investments recently loaned USD 25 million to Annapurna Finance, a microfinance institution (MFI) seeking to reduce poverty and spread economic opportunity in India. The MFI plans to on-lend the funds to families as well as smaller businesses looking to acquire solar panels and other equipment that reduces the need for fossil fuels. As Annapurna has “a strong history in financial inclusion but limited to no experience in climate finance,” responsAbility plans to deploy “a combination of in-house and external advisory and support teams” to help the MFI optimize its use of the funds.
Annapurna is a non-banking finance company offering loans ranging in size from INR 1,500 (USD 18) to INR 2.5 million (USD 30,000). These loans span 10 categories, such as group loans; housing loans; finance for people with disabilities; and micro-, small, and medium-sized enterprise (MSME) lending. The MFI reports a portfolio of INR 87 billion (USD 1 billion) outstanding to 2.5 million clients who are served by 10,000 employees from 1,200 branches as of March 2023.
Established in 2003 and headquartered in Zurich, responsAbility deploys investments in low- and middle-income countries with the aim of increasing financial inclusion, reducing the effects of climate change, and supporting agriculture deemed sustainable. As of August 2023, the firm had USD 4.8 billion in private debt and equity investments under management in 80 countries.
By Pranav Agarwal, Research Associate
Sources and Additional Resources
Press release from responsAbility on Annapurna investment
https://www.responsability.com/en/press-releases/a-responsability-managed-climate-fund-accelerates-india-s-climate-progress-with-usd-80-million-in-new-loan-agreements
Annapurna Finance homepage
https://annapurnafinance.in/
Press release from responsAbility on climate fund launch
https://www.responsability.com/en/press-releases/responsability-launches-usd-200-m-climate-fund
Previous MicroCapital article on responsAbility’s work in India
https://www.microcapital.org/microcapital-brief-responsability-lends-18m-to-fintech-u-gro-capital-for-msme-funding-in-india/
Previous MicroCapital article on responsAbility’s work in Africa
https://www.microcapital.org/microcapital-brief-equity-group-nets-over-165m-from-ifc-bii-fmo-responsability-symbiotics-for-climate-projects-financial-inclusion-for-msmes-in-africa/
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