Annapurna Finance, a microfinance institution (MFI) based in the Indian state of Odisha, recently raised INR 193 billion (USD 35 million) from US-based NGO Accion, US-based impact investor Encourage Capital and Dutch cooperative investor Oikocredit. The funding is to be used to boost the digitalisation of Annapurna’s operations and for developing “clean and sustainable energy financing products [for] small businesses and individuals.” Encourage Capital will supplement its investment with advisory services supporting Annapurna in launching these green products. Accion also will provide technical assistance to support the MFI in “transforming itself into a fully digital financial services entity.”
Neither the breakdown of the investment total among the participants nor the sizes of the stakes purchased have been released. Of the three investors, only Oikocredit is a previous investor in the MFI. The firm’s other investors include the Asian Development Bank, the Belgian Investment Company for Developing Countries (BIO), India’s DCB (Development Credit Bank) Bank, the Oman India Joint Investment Fund, the Small Industries Development Bank of India and US-based Women’s World Banking.
Established in 2009, Annapurna Finance delivers services for women; people with disabilities; and micro-, small and medium-sized enterprises, focusing on rural areas via 850 branches in 19 states in India. These services include insurance as well as secured and unsecured loans for purposes such as dairy and crop farming, general business needs, housing upgrades, solar equipment, and appliance purchases. As of 2020, Annapurna reported a gross loan portfolio of INR 40 billion (USD 536 million) outstanding to 1.7 million borrowers.
Founded in 1961, Accion is a nonprofit that seeks to alleviate poverty by offering services such as microenterprise loans and business training. The organization has 110 partner microfinance institutions (MFIs) providing financial services to entrepreneurs in 50 countries in Africa, the Americas and Asia. As of 2020, Accion reports total assets of USD 439 million. The investment subsidiaries of Accion include Accion Venture Lab, Accion Global Investments and Accion Frontier Investments. Accion also conducts research via The Center for Financial Inclusion.
Encourage Capital was founded in 2014 upon the merging of Wolfensohn Fund Management and EKO Asset Management Partners. The firm focuses on placing impact investments in organizations that promote sustainability in areas such as energy, financial inclusion, seafood production and infrastructure. Financial data on Encourage Capital are not available.
Founded in 1975, Oikocredit invests debt and equity in financial inclusion, agriculture and renewable energy in Africa, Asia and Latin America with the goal “to improve the quality of life of low-income people or communities in a sustainable way.” As of June 2021, Oikocredit has investments valued at EUR 835 million (USD 969 million) deployed via 529 partners.
By Zachary DeLuca, Research Associate
Sources and Additional Resources
Annapurna homepage
https://annapurnafinance.in/
Accion homepage
https://www.accion.org/
Accion financials
https://www.accion.org/about/accion-financials
Encourage Capital homepage
http://encouragecapital.com/
Oikocredit homepage
https://www.oikocredit.coop/
Previous MicroCapital article on Oikocredit
https://www.microcapital.org/microcapital-brief-oikocredit-opportunity-international-commit-100m-to-education-finance-in-low-income-countries/
Previous MicroCapital article on Annapurna
https://www.microcapital.org/microcapital-brief-microfinance-institution-annapurna-raises-30m-in-equity-from-tiaas-nuveen-other-investors-to-support-lending-for-women-smes-housing-green-finance-in-india/
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