MICROCAPITAL BRIEF: Investors Commit $73m to as Yet Unapproved Government-backed India Inclusive Innovation Fund, Target Size is $918m

Undisclosed investors have reportedly committed approximately INR 4 billion (USD 73.4 million) to the India Inclusive Innovation Fund, a government-sponsored fund intended to provide capital to early-stage ventures serving low-income clients. The fund, which was announced in 2011, is pending final approval from the Cabinet, which is slated to make a decision on the fate of the effort by may. Sam Pitroda, chairman of the National Innovation Council (NIC), the government committee that would directly manage the fund, reportedly said, “We will begin operations as soon as we receive approval… NIC is in talks with banks and foreign lending agencies, including government-backed funds in the UK, to raise capital.”

The target size of the fund is INR 50 billion (USD 918 million) of which it is to receive 15 to 20 percent from the government. The fund is intended make individual investments of between INR 2 million (USD 36,700) and INR 50 million (USD 918,000) directly into ventures rather than via other funds.

The Indian nonprofit National Association of Social Enterprises (NASE) will reportedly aid NIC in identifying potential investments for the fund. Ashwin Naik, a member of NASE and CEO of Vaatsalya, a chain of lower cost healthcare facilities in India, reportedly commented, “There is a big gap of funding for very early-stage ideas. I hope this fund will fill that gap.”

By Nicole Boyd, Research Associate

Sources and Additional Resources:

The Economic Times. “Investors commit over Rs 400 crore for funding new ventures for the poor,” http://articles.economictimes.indiatimes.com/2013-03-28/news/38099565_1_matrix-partners-india-lok-capital-motilal-oswal-private-equity

MicroCapital. April 7, 2013, “MICROCAPITAL BRIEF: NGOs, Government Unite In Effort to Increase Savings Group Membership to 50m Worldwide by 2020,” https://www.microcapital.org/microcapital-brief-ngos-government-unite-in-effort-to-increase-savings-group-membership-to-50m-worldwide-by-2020/

MicroCapital. March 27, 2013, “MICROCAPITAL BRIEF: Indian Government Commits $183m Each to Women-Only Bank, Nirbhaya Fund for Women’s Empowerment,” https://www.microcapital.org/microcapital-brief-indian-government-commits-183m-each-to-women-only-bank-nirbhaya-fund-for-womens-empowerment/

MicroCapital. March 25, 2013, “MICROCAPITAL BRIEF: Karnataka State Government Launches Mysore City Street Vendors Multipurpose Cooperative Society to Provide Loans to Indian Street Vendors,” https://www.microcapital.org/microcapital-brief-karnataka-state-government-launches-mysore-city-street-vendors-multipurpose-cooperative-society-to-provide-loans-to-indian-street-vendors/

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