UK government-owned emerging markets fund of funds manager CDC Group has made commitments totalling $30 million to two private equity funds which will invest in microfinance institutions (MFIs).
The firm has invested $15 million in the India Financial Inclusion Fund, which is managed by Caspian Capital Partners. The fund provides growth capital and strategic support to existing and start-up MFIs, with a specific focus on India and an emphasis on towns in rural areas with low microfinance penetration.
The second commitment of $15 million has been made to Catalyst Microfinance Investors. This fund will invest in a network of rapidly growing greenfield microfinance institutions in countries such as India, Pakistan, Nigeria and Ghana.
By investing in MFIs, the funds aim to give people on low incomes access to a range of financial services, including credit, savings and fund transfers.
“Around 400 million people do not have access to formal, affordable financial services in India,” says Hywel Rees-Jones, managing director of alternative investments at CDC. “The India Financial Inclusion Fund will improve funding to microfinance institutions, bringing improved credit opportunities in much needed regions. Caspian Capital Partners have proven their ability to increase microfinance penetration in India, contributing to the growth of the sector and making a lasting developmental impact in rural regions.”
D.C.