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LeapFrog invests in Asian and African companies that provide 'life-changing' services to emerging consumers. So far, LeapFrog has reached out to 48 million people across 20 emerging markets.
In India, we have invested close to $100 million in several companies. IFMR Holdings (IFMRH) is a leading example of the kind of company we seek, and is changing the face of financial inclusion in India. We have come to know them well since our investment in their largest subsidiary, IFMR Capital (IFMRC), early in 2014.
First and foremost, it’s about people. The IFMRH team has an entrepreneurial, professional and passionate management team -- one that has a strong track record, yet continues to learn. And crucially, we share a vision: to achieve financial inclusion at a vast scale through innovation and by putting the customer first.
The quality of this team is best demonstrated through understanding the scale, reach and growth of IFMRH’s three current businesses -- IFMR Capital, IFMR Rural Finance and IFMR Rural Channels.
IFMR Capital is a fast-growing debt capital markets platform reaching out to 75 NBFC clients who offer micro loans, small business finance, affordable housing and commercial vehicles finance among other products. It enables financing to over 15 million excluded people in 481 districts and 30 states across India as of today. IFMRC uses a variety of structures including direct loans, securitisation, guarantees, arrangement and placement of commercial paper, bonds, debentures, and other capital markets products. It introduced the world’s first multi-originator securitisation for micro loans and listed India’s first securitised debt instrument on the BSE. It recently launched a fund advisory and management platform and India’s first rated (AA) financial inclusion debt fund. IFMRC also provides rating enhancement advisory services and recommends improvements in operations and systems to lenders.
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LeapFrog sees the two other subsidiaries of IFMRH as world leaders in developing financial product distribution models for emerging consumers.
IFMR Rural Finance has developed the Kshetriya Gramin Financial Services (KGFS) model for remote rural markets. KGFS offers insurance, savings, payments and pensions products, while prioritising customer needs and protection through a comprehensive wealth management client-servicing model. From the perspective of LeapFrog’s global financial services experience, it is both unique and compelling. The model is being put to work through the third business, IFMR Rural Channels, which reaches out over 600,000 clients through 242 branches in rural areas.
The new capital will accelerate IFMR Holdings' ground-breaking work -- developing innovative business models and new products to meet the vast financial inclusion opportunity across India.
Michael Fernandes is partner and co-head, Asia, LeapFrog, and led the IFMRH transaction
