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LeapFrog Investments, a private equity firm in financial services in developing markets like Africa and Asia, will invest $29 million in Chennai-based NBFC, IFMR Capital. The deal is the first to be made from LeapFrog’s Fund II.
Six leading global insurers and financial institutions such as MetLife, Prudential Financial, Swiss Re and JP Morgan Chase have floated this $400-million “specialist” micro finance private equity for the developing countries.
Acting as a bridge between capital markets and high quality financial institutions that reach under-served households and businesses, IFMR Capital operates in over 345 districts across 24 States in India. It delivers credit, insurance and other financial services to over 6.6 million active borrowers and 7.6 million insured customers.
LeapFrog Investments would also bring onboard its operational expertise and knowledge of best practices. A key focus of the partnership will be to leverage IFMR Capital’s structuring expertise, reach and relationships across financial products and sectors in India.
According to Jim Roth, Co-Founder of LeapFrog Investments, IFMR Capital leadership team aligned business acumen with a strong sense of social purpose.
CEO of IFMR Capital, Kshama Fernandes, said that there was a strong shared sense of purpose between LeapFrog and IFMR about sustainability and promoting financial inclusion. “Their investment and their international team’s distinctive expertise will help enhance our capacity and our ability to provide valuable product and service offerings to our clients.”
IFMR Capital was created to enable risk transmission for high-quality originators operating in under-banked markets. The participation of LeapFrog would strengthen its ability to work with a much larger number of originators across asset classes and more among the low-income households in India.
Some 30 million micro, small and medium–sized enterprises in India today account for 45 per cent of Indian industrial output, yet only 5-10 per cent have access to formal sources of funding.
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