In a first in the country, Mumbai-based wealth advisory firm Waterfield Advisors will soon launch a $15-million Development Impact Bond (DIB) for the farm sector. It has roped in Tata Trusts’ CInI as the implementation partner for the same.
The company has launched the first tranche of $3 million, and it will raise the remaining part depending of the success of the first issue. The company is financing the bond — Lakhpati Kisan — through domestic capital from ultra high networth individuals (UHNI) and family foundations.
“The initiative is to transform the livelihood of 6,500 small and marginal households, which, in turn, will help in creating ‘lakhpatis’ in Jharkhand, Gujarat and Odisha. The DIB will help in economically liberating, crisis-hit farm sector and bring them greater financial stability,” Waterfield Advisors’ founder and CEO Soumya Rajan told BusinessLine .
“The move will also bring in more private capital into the farm sector,” she added.
Globally, DIBs have been used as a social financing instrument and some of these have been implemented in India with foreign capital. This is the first DIB raised with domestic funds, with the intention that a significant portion of the funding to be used for Not For Profit and social initiatives.
This move is a part of Waterfield Advisors’ Philanthropic Advisory Services, wherein it directs philanthropic capital towards a social cause.
The bond will provide capital to a Tata Trusts’ initiative that is being implemented on the ground by Collective for Integrated Livelihood Initiatives (CInI) since 2015. CInI is an organisation that functions as the nodal agency for Sir Ratan Tata Trust and Navajbai Ratan Tata Trust’s Central India Initiative.
Lakhpati Kisan bond
The CInI project aims to improve the livelihood of small and marginal farmers by providing interventions to increase their income three-fold over a three-year period from ₹40,000 per annum to ₹1.2 lakh. CINI has created over 25,000 lakhpati families and nurtured 250 rural tribal entrepreneurs. Through Lakhpati Kisan bond, farmers will get interventions in the areas of capacity building, land and water management, high value agriculture development, poly-house nurseries for yield enhancement and livelihood layering.
“This would help in developing the eco-system for impact investing,” she added.
Jharkhand has 40 per cent of its households below the poverty line, while the same in Odisha and Gujarat are 30 per cent and 20 per cent, respectively.
Waterfield Advisors, which works with family-owned businesses in financial planning, succession, family governance and philanthropy, manages assets worth $2.5 billion.