IFMR FImpact Investment Fund
Last updated 11 May 2020, by Impactyield.
The broad objective/purpose of the Fund is to promote financial inclusion in India by facilitating development of the Indian microfinance sector. The Fund seeks to achieve this by investing in various securities/instruments of microfinance institutions and its underlying assets.
The microfinance sector in India is one of the largest financial access movements in the world and is poised to overtake direct efforts by the banking sector to provide essential financial services to the under-banked populations. The sector in India has been stymied by the lack of access to a diversified source of growth capital, especially with a medium to long term tenor, which in turn can be attributed in part, to a nascent finance market-place.
IFMR identifies this market need as an opportunity to channel institutional domestic and offshore capital to the emerging asset class of Indian microfinance debt instruments. The focus of the first fund series is to facilitate growth and development of the Indian microfinance sector, by selecting from a set of high quality microfinance institutions (MFIs) that operate in India.
The fund will invest in medium to long term senior and mezzanine debt of microfinance institutions. The fund will be close ended and will follow a passive hold to maturity strategy with active post investment monitoring. The hold to maturity strategy will significantly cut down interest rate and reinvestment risks.
Key performance indicators
Asset manager: IFMR Investment Managers
Product track record: Fund has 8 years of track record
Target IRR: 13%
Committed Capital: 1,000,000,000 INR (Indian Rupee)
Target return category: Risk-adjusted market-rate of return
Fund domicile: India
Product status: Closed - still investing
Inception year: 2014
Vintage year: 2015
Target close date: 01/06/2014
Product term: 6 years
Assets under management: 1,000,000,000 INR (Indian Rupee)
Investment size: Min: 0; Max: 0; Avg: 0
Currency of investments: INR (Indian Rupee)
Currency for fund / product figures: INR (Indian Rupee)
Fund investments to date: 15
Fund investments to date exited or repaid: 2
Management fee: 1%
Carried interest: n.a.
Hurdle rate: n.a.
GIIN Investors' Council Investment: No
Limited Partners / Investors: n.a.
Limited Partner / Investor Type: Development Finance Institution (DFI), Family Office
The fund will be a significant step in lowering the dependence on informal sources of borrowing in India. We estimate that a USD 20 million investment in the fund will enable provision of formal finance to more than 600,000 microfinance clients over the course of the fund.
By developing a vibrant and mature long-term debt capital market in India, borrowers will have increased access to funds to help alleviate poverty and lead to an improved quality of living.