The Institute for Financial Management and Research (IFMR) Trust of India is to establish a USD 40 million investment vehicle called the Microfinance Classic Fund to provide funding to early-stage microfinance institutions (MFIs). A group of investors including ICICI Bank, India’s second-largest bank with total assets of USD 79 billion, is supporting the IFMR Trust with the initiative. The fund will have both domestic and offshore fund status and it will be registered overseas to facilitate investments from international institutions.
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NEWS WIRE: India: Institute for Financial Management and Research (IFMR) Trust to Float Fund to Support Microfinance Institutions
WHO’S WHO IN MICROFINANCE: Gray Ghost Microfinance Fund LLC
The Gray Ghost Microfinance Fund LLC, founded in November 2003 by Robert Pattillo, manages a for-profit investment fund comprised solely of investments in microfinance funds. Headquartered in Atlanta, Georgia, Gray Ghost, a limited liability company, manages USD 75 million in total assets. Essentially, Gray Ghost’s fund is a fund of funds. It invests in microfinance funds that supply start-up and expansion capital to microfinance institutions (MFIs) worldwide. Some of Gray Ghost’s investments include USD 4.9 million in Antares Equity Participation Fund (a fund conceived by Robert Pattillo), USD 4 million in Deutsche Bank’s Global Commercial Microfinance Consortium, USD 2 million in Catalyst Microfinance Investors, and USD 2.6 million in Bellwether Microfinance Fund.
Indian Microfinance at Long Last Attracting the Attention of Venture Capitalists
India, one of the most developed microfinance markets in the world, may have finally received long-awaited recognition. Venture capital has come to Indian microfinance, supporting the commercialization of the industry by providing much-needed capital. The joint venture is led by the American investment company Gray Ghost and the Dutch Hivos-Triodos Fund. To skirt India’s notorious red tape, the partners transformed an existing Indian microfinance institution into Bellwether, intended to be a source of financing for India’s most innovative microfinance institutions. The fund is capitalized at $10 million, and will address small and medium-sized institutions, which are considered less able to attract finance from the regular financial sector, relative to larger microfinance institutions.The mission of the fund is to promote the commercialization of microfinance through targeted investments and will seek out microfinance institutions that are or want to be commercially sustainable. A board and committee to advise on investments will together institutionalize Bellwether’s involvement with the chosen microfinance institutions. As the CEO of an upcoming microfinance institution spends more than 60% of his or her time fundraising, such an influx of funds will no doubt improve the availability and quality of microfinance services.
Additional Resources
1) Main article discussed in entry, Microfinance Information Exchange (MIX): "Hivos-Triodos Fund Starts the First Venture Capital Fund in India."
2) Bellwether Microfinance Fund