Caspian launches Indian Debt Vehicle Focused on Impact Sectors

Grassroots is proud to announce the launch of our partner Caspian’s third fund – Caspian Impact Investments (CII). CII will be an Indian vehicle providing debt capital to impact sectors.

Caspian Advisors Private Limited announced the launch of Caspian Impact Investments (CII) with USD 10 million of committed investments from FMO, Triodos Doen and Hivos-Triodos Fund, Gray Ghost Microfinance Fund, promoters Caspian, and local Indian investors. The targeted fund size is USD 40 million. CII is an Indian local vehicle that will provide debt capital to a wide range of institutions serving low income or financially excluded communities. The initial focus will be businesses in the Microfinance, Small Business Financing, Affordable Housing and Food & Agriculture sectors. This will be the third fund launched by Caspian Advisors Private Limited, with prior funds totaling USD 120 million in assets at the Funds’ respective closings.

In India, the current supply of debt to social impact enterprises is scarce. CII seeks to invest in specialized intermediaries that support these impact enterprises, building the capacity and resources of these institutions and their clients, helping to promote the growth of social enterprises in India and enabling social entrepreneurs to scale their businesses without depending entirely on equity capital or debt funding from banks, which are primarily driven by priority sector or directed lending considerations.

The investors have extensive experience both with Caspian and impact investing: FMO and Triodos Investment Management of the Netherlands are among Europe’s most experienced impact investors and the Gray Ghost Microfinance Fund of the United States is a pioneering global fund of funds with expertise in microfinance and impact investing. They were also founding investors in Caspian’s first initiative, the Bellwether microfinance equity fund which was launched in 2005 as the first fund focused on the Indian microfinance sector. This fund is now fully invested. These lead investors share the goal of providing responsible finance that drives social and environmental as well as financial returns.

The Fund will also collaborate with Dutch NGO Hivos through the ProCif program that is aimed at improving the ability of producer organizations in the Food & Agriculture sector to access debt from this Fund. In addition, FMO will provide technical assistance to the Fund for Research and Development of the Food &Agriculture portfolio.

“As investors in both Caspian’s previous funds, we are very familiar with the lead role that the team has played in developing the microfinance and impact investing space in India. CII uses the team’s considerable skills and experience to good advantage to address a critical gap between capital providers and several of the most important sectors addressing pressing social needs,” said Paul DiLeo, Gray Ghost Microfinance Fund.

According to Dirk Elsen, Director Emerging Markets at Triodos Investment Management, “Our investment in CII very well fits with our aim to contribute to the further development of inclusive financial services in emerging markets as well as pursuing a broader impact investing agenda, particularly in the Food & Agriculture sector. Many who are active in this sector – small-scale farmers but also rural SMEs – still remain excluded from financial services. CII wants to change this.”

“For smaller institutions that are providing Microfinance, Small Business Finance, Housing Finance and Agricultural, access to debt financing is still limited. By providing these entities with debt, CII adds value and creates impact,” added Anneloes Mullink, Investment Officer at FMO.

“While there are several funds that are either already investing or looking to invest in impact enterprises in India, most funds today are offshore and focused on equity due to the significant challenges facing non-resident investors providing debt. CII offers impact investors an opportunity to reach these social enterprises and extend their impact,” said S. Viswanatha Prasad, Founder and Managing Director of Caspian Advisors.

About Caspian: Caspian Advisors is an investment advisory firm that invests capital in socially responsible, multiple bottom line businesses delivering financial and social value. Caspian’s total assets under management total over USD 100 million, spread across two funds: the first-generation Bellwether Microfinance Fund, a pioneering Indian on-shore equity and debt fund launched in 2005 that invests in start-up and mid-sized Indian microfinance institutions, and the second-generation India Financial Inclusion Fund, a USD 90 million fund that was set up in August 2008 as an off-shore India-focused equity fund, investing in high-growth, small to medium MFIs, affordable housing providers and enabler of financial inclusion. Caspian’s triple bottom line objectives are financial inclusion, capital appreciation, and social performance initiatives.

For more information, please contact info@caspian.in or +91 40 66297100 / 66465884, or visit our website www.caspian.in