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CDC invests in two microfinance emerging market funds

CDC Group, the UK government-backed private equity emerging markets fund of funds investor, is making new commitments totalling USD30m to two private equity funds which will invest in m

CDC Group, the UK government-backed private equity emerging markets fund of funds investor, is making new commitments totalling USD30m to two private equity funds which will invest in microfinance institutions.

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.
 
USD15m has been committed to India Financial Inclusion Fund, managed by Caspian Capital Partners. The fund provides growth capital and strategic support to existing and start-up MFIs to help them grow. The fund focuses solely on India, with an emphasis on towns in rural areas with low microfinance penetration.

USD15m has been committed to Catalyst Microfinance Investors. This fund will invest in a network of efficient, rapidly growing greenfield microfinance institutions in countries such as India, Pakistan, Nigeria and Ghana. The fund will aim to help MFIs accelerate their expansion and provide capital to low-income groups and micro-enterprises located in poor communities. 

Hywel Rees-Jones, managing director, alternative investments at CDC, says: ‘Around 400 million people do not have access to formal, affordable financial services in India. 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.
 
‘Catalyst Microfinance Investors will be using the expertise of ASA, a renowned Bangladeshi NGO, which has an impressive track record having been involved in microfinance since 1991. Microfinance has played a vital role in boosting development in Bangladesh by increasing the range of financial services available to poor people traditionally excluded from the mainstream. We hope and expect that this success can be applied to other emerging markets.’
 
Caspian Capital Partners is an independent microfinance adviser based in Hyderabad, India.
 
Catalyst Microfinance Investors is managed by Catalyst Microfinance Investment Company, a joint venture between ASA and Sequoia – a Dutch corporate finance boutique.

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