LeapFrog Investments has sold part of its stake in IFMR Capital to Standard Chartered Private Equity.
The exit comes on the heels of a similar sale by LeapFrog to Fidelity’s Eight Road Ventures in November.
Standard Chartered intends to invest up to USD50 million, with the first tranche of USD17 million already completed. LeapFrog remains a leading shareholder and backer of the enhanced business.
“IFMR Capital is a remarkable firm that is uniquely extending the footprint of financial inclusion in India,” says Michael Fernandes, partner and co-leader of LeapFrog’s Asian investments. “The level of financial innovation and delivery of pioneering capital market products is testament to its outstanding management team. We look forward to continuing leaps of growth with IFMR Capital as they extend their reach to tens of millions of underserved people.”
IFMR Capital, launched in 2008, has enabled over 100 Indian financial institutions (termed originators) to raise debt from the capital markets. By facilitating debt financing of some USD6 billion to its originators, it has enabled them to serve over 25 million individuals in more than 500 districts of India, including some of the poorest and most remote regions. IFMR Capital has also launched three domestic alternative investment funds offering mid to long-term debt funding to these originators.
The financial structures designed by IFMR Capital have catalysed investment in financial institutions catering to low income households and small enterprises. Over 100 large investors (including banks, asset managers, insurance companies, DFIs and private wealth managers) continue to invest in transactions structured and arranged by IFMR Capital.
LeapFrog invested in IFMR Capital in 2014. Since this time, LeapFrog has partnered with IFMR’s exceptional team, to achieve a tripling of their customer base to 25 million, as well as expansion to 30 Indian states and Union Territories.
Kshama Fernandes, managing director and CEO, IFMR Capital, says: “LeapFrog Investments continues to be an important partner in our journey to build a stable and inclusive financial ecosystem in India. The strategic expertise of their team, coupled with deep knowledge of how to scale financial businesses in emerging markets while delivering returns and positive social impact, creates synergies that enable IFMR Capital to continue to accelerate growth of the business.”
According to the World Bank, globally 38 per cent of adults remain without access to financial services. India and China still have the largest share of under-served individuals.
