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IFMR Holdings raises $ 25 million from Accion, LeapFrog and Lok Capital

'LeapFrog is close to IFMR through our direct investment in IFMR Capital'

BS Reporter Chennai
Last Updated : Aug 14 2015 | 1:52 AM IST
IFMR Holdings, a financial inclusion platform, has raised $25 million in equity from Accion, a financial inclusion pioneer, LeapFrog Investments, a specialist investor in emerging-market financial services, and Lok Capital, an Indian impact investment firm. Accion is investing $12.5 million of the total, LeapFrog Investments $9 million and Lok Capital $3.5 million.

"This is a vast challenge. About 86 per cent of Indians do not borrow from a formal source. Only one of every two Indians has a savings account, and insurance penetration is barely four per cent," according to IFMR.

It serves financially-excluded households and enterprises through three businesses: IFMR Capital, IFMR Rural Finance and IFMR Rural Channels. IFMR Capital is a debt capital markets platform for 75 origina-tors offering micro-loans, small business finance, affordable housing and commercial vehicles finance, and it reaches over 15 million financially-excluded people.

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Meanwhile, IFMR Rural Finance — a technology licensor that develo-ped the Kshetriya Gramin Financial Services (KGFS) model for the remote rural markets; and IFMR Rural Channels is a credit, insurance and pensions provider to over 600,000 clients through 242 branches in rural areas.

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Bindu Ananth, chair of IFMR Trust, the promoters of IFMR Holdings, said that this comes at an important inflection point for IFMR Holdings. Against the backdrop of a very favourable policy environment for financial inclusion, we are accelerating growth across all our businesses. We intend to be at the forefront of business models, combining scale and high-quality financial services for many millions of Indians."

LeapFrog Partner and co-head Asia Michael Fernandes said, "LeapFrog is close to IFMR through our direct investment in IFMR Capital. We are also investing in the holding company because the leadership team understands how to reach parts of India that others don't. This is a platform to reach emerging consumers with a wide range of empowering financial tools"

IFMR Holdings CEO Sucharita Mukherjee said, “Our belief is that access to finance, supported by well-functioning markets, is critic-ally important for low-income households. This partnership with like-minded investors such as Accion, LeapFrog and Lok brings the benefit of international best practice and a wide range of global insights to this work in India.”

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First Published: Aug 14 2015 | 12:34 AM IST

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