IFMR Fimpact Investment Fund has been rated ‘CARE AA (AIF Category I fund)’ by CARE Ratings, which denotes that the asset selection or management capability as ‘good’. (IFMR Fimpact Investment Fund has been rated ‘CARE AA (AIF Category I fund)’ by CARE Ratings, which denotes that the asset selection or management capability as ‘good’.)
IFMR Fimpact Investment Fund has been rated ‘CARE AA (AIF Category I fund)’ by CARE Ratings, which denotes that the asset selection or management capability as ‘good’.
(IFMR Fimpact Investment Fund has been rated ‘CARE AA (AIF Category I fund)’ by CARE Ratings, which denotes that the asset selection or management capability as ‘good’.)

IFMR launches debt fund for MFIs

The fund will subscribe to the debentures of microfinance institutions, providing them medium-term debt

Mumbai: IFMR Investment Managers Pvt. Ltd, the asset management arm of Chennai-based IFMR Trust, has launched a 100 crore debt fund called Fimpact Investment Fund to finance domestic microfinance institutions, a top official of the company said.

The fund will subscribe to the debentures of microfinance institutions, providing them medium-term debt.

Registered under the alternative investment fund II category specified by the Securities and Exchange Board of India (Sebi), the fund will be looking at an investment period of five-six years.

“Microfinance institutions have access to short-term funds from banks and slightly longer-term private equity. We, however, aim to provide medium-term debt to the institutions, which is not readily available," V.G. Suchindran, chief executive officer at IFMR Investments, said in an interview.

The fund has been raised from domestic institutional investors and will be looking to offer between 14-15% returns to its investors. The firm is looking at a quarterly pay-out of returns to the investors.

IFMR Fimpact Investment Fund has been rated ‘CARE AA (AIF Category I fund)’ by CARE Ratings, which denotes that the asset selection or management capability as ‘good’.

While the firm has raised money domestically for the current fund, it expects to tap foreign investors in the future.

Suchindran said that the firm has decided to invest in 12 micro lenders to begin with. IFMR has also contributed 15 crore towards the fund.

“The average ticket size will be around 10-15 crore," he said.

According to a report released by IFMR on Wednesday, India’s microfinance outreach is the highest in the world at 30.3 million borrowers till March, of which 27.9 million borrowers are linked to non-banking finance companies-MFIs.

“India still has 650 million adults who lack access to a formal source of borrowing," the report stated.

IFMR Investments will also start a dedicated fund for affordable housing and small and medium enterprises.

“We will also be looking at funding opportunities in the affordable housing space. We will seek approval from the Sebi and we expect to have a corpus of 250 crore," Suchindran said.

Close