MICROCAPITAL BRIEF: Incofin Sells Equity Stake in Annapurna Microfinance of India as Asian Development Bank, Bamboo Financial Inclusion Fund, Oikocredit Buy In

Belgium-based Incofin Investment Management recently sold all of its shares in India’s Annapurna Microfinance Private Limited to a group of investors, among whom two have been identified, the Bamboo Financial Inclusion Fund, which is managed by Bamboo Capital Partners, and Dutch cooperative investor Oikocredit. In a separate transaction, the Philippines-based Asian Development Bank paid the rupee-equivalent of USD 20 million for a stake of undisclosed size in Annapurna. The sizes of the stakes and the prices paid in the Incofin transaction remain confidential.

Paul Flegler, ADB’s principal investment specialist for private sector operations, said, “ADB’s support to Annapurna will expand its lending portfolio, helping ensure that rural women and micro and small enterprises needing capital can have better access to finance.”

Regarding the support that the microlender has received from Incofin since its investment in 2012, Annapurna director Dibyajyoti Patnaik commented that, “Their rural and social focus inspired us to reach more rural and interior parts of India.”

Annapurna’s products include group and individual loans for enterprise and housing as well as lending tailored for people with disabilities. Its other investors include US-based NGO Women’s World Banking and the following government-backed institutions: the Belgian Investment Company for Developing Countries (also known by its Dutch acronym BIO), the Oman India Investment Fund and the Small Industries Development Bank of India.

As of February 2019, Annapurna has a loan book of INR 22 billion (USD 3.1 billion) outstanding to 1.4 million women served by 4,400 employees via 500 branches. The institution grew from a program of the nonprofit Peoples Forum, which began offering “doorstep” banking in 2005 in rural parts of the state of Odisha. Now registered as a non-banking financial company-microfinance institution, Annapurna offers products such as collateral-free group loans, housing loans and entrepreneurial support in “areas where formal financial institutions find it unprofitable to settle.”

Incofin is a for-profit firm that was founded in 2001 and seeks “to promote inclusive progress.” It has about 325 investments in 65 countries as of January 2019. This portfolio, valued at USD 1 billion, comprises the following funds: agRIF, BRS Microfinance Coop Fund, Fairtrade Access Fund, Fonds pour l’Inclusion Financière en République Démocratique Congo (FPM), Incofin CVSO, Invest in Visions, Rural Impulse Fund (RIF) II, Volksvermogen and a loan portfolio of vdk Bank.

Established in 1966, ADB’s goal is to eradicate poverty in the Asia-Pacific region. It is owned by 67 countries, of which 48 are located in the region. For 2017, the ADB had a total budget of USD 32.2 billion, including USD 11.9 billion in co-financing.

Bamboo Capital Partners, which has five offices on four continents, invests with the aim of generating both financial and social returns. As of 2017, it had USD 300 million in assets under management, deployed in approximately 30 countries.

Founded in 1975, Oikocredit is a cooperative that invests in microfinance, fair trade, agriculture and renewable energy. As of 2018, Oikocredit has EUR 980 million (USD 1.1 billion) in capital invested in 700 firms, including 500 involved in financial inclusion.

Sources and Additional Resources

Incofin news release
https://www.incofin.com/incofin-sells-remaining-stake-in-annapurna-microfinance-a-leading-microfinance-institution-in-eastern-central-india/

ADB news release
https://www.adb.org/news/adb-annapurna-sign-deal-supporting-access-finance-women-rural-india

Annapurna homepage
http://ampl.net.in/

Bamboo homepage
http://www.bamboocp.com/

Oikocredit homepage
http://oikocredit.coop/

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