MICROCAPITAL BRIEF: United Kingdom’s CDC Group Invests $10m in Lok Capital II, Private Equity Fund Focused on Microfinance in India

CDC Group, the UK’s government-owned development finance institution, recently invested USD 10 million in Lok Capital II, a private equity fund managed by Lok Capital, partner organization of the non profit Lok Foundation based in New York City, USA.

Lok Capital II, in which the CDC Group is an anchor investor, makes long-term equity investments in Indian microfinance institutions (MFIs). The deal boosts CDC Group’s overall investment in microfinance to USD 120 million.

According to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, Lok Capital has USD 22 million assets under management as of 2009.

About the CDC Group:

CDC is a development finance institution (DFI), owned by the UK government’s Department for International Development. The organization’s mission is to foster growth in sustainable businesses and to help raise living standards in developing countries. It invests in funds focused on the emerging markets of southern Asia and sub-Saharan Africa. At the end of 2008, CDC’s portfolio was worth EUR 928 million (USD 1.3 billion). As of 2010, CDC’s Microfinance Investments total USD 120 million.

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. The fund was launched in 2006 with USD 22 million. Investors include ACCION International, Commonwealth Development Corporation (CDC), Developpement International Desjardins, Netherlands Development Company (FMO), International Finance Corporation (IFC), KfW, and responsAbility. The average investment size ranges from USD 500,000 to USD 3 million. The Lok Foundation was created along with Lok Capital LLC to provide specialized technical assistance to Indian MFIs.

About Lok II

Lok II is a venture capital fund that is based in Mauritius and invests primarily in Indian microfinance institutions (MIFs). It was founded in 2010 and is sponsored by the Lok Foundation, a non-profit corporation based in New York. The International Finance Corporation (IFC), the investment arm of the World Bank, has committed USD 15 million in equity to the fund, 20 percent of the fund’s total size of USD 80 million. As of May 3, 2010, no other investors have been specified.

By Trevor Kwong, Research Assistant

Sources and Additional Resources:

[1] Source: CDC Group Press Release: CDC to boost microfinance industry in India with US$10m investment:

http://www.cdcgroup.com/uploads/101022cdcpressrelease-cdctoboostindianmicrofinanceindustrywith10minvestment_2_.pdf

[2] MicroCapital Universe: CDC Group:

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CDC+Group

[3] MicroCapital Universe: Lok Capital LLC:

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+Capital+LLC

[4] MicroCapital Universe: Lok II:

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+II

[3] Microfinance Information Exchange: Lok Capital:

http://www.mixmarket.org/funders/lok-capital

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/tiki-index.php

Similar Posts: