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Grameen Koota Reaches Milestone with 1 Million Microfinance Customers

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Monday, July 27, 2015 3:00PM IST (9:30AM GMT)
Bangalore, Karnataka, India

Bangalore-based NBFC –MFI, Grameen Koota Financial Services Pvt Ltd (Grameen Koota) has reached a new milestone of 1 million microfinance customers, in a testimony to its strong client-centric approach aimed at providing holistic financial and social services.


Grameen Koota, with 3,000 employees working in 270 branches spread across Karnataka, Maharashtra, Tamil Nadu, Madhya Pradesh and Chhattisgarh, reached one million customers with a portfolio of Rs.1, 602 as of 30th June 2015. As part of its future mission, Grameen Koota has been striving to reach over 2 million poor and low income households through financial products and development services by 2020.

Founded as an NGO project in 1999 by Vinatha M. Reddy to cater the need of micro-credit to the rural low-income households, the MFI was modeled after taking inspiration from the success story of Nobel Laureate Prof.Muhammad Yunus and his Grameen Bank. Suresh K Krishna as Co-Promoter and Director supported her in this initiative, which has grown largely after its transition into a non-banking financial corporation (NBFC) in 2007-08.

On reaching one-million customer base, Vinatha M Reddy, who is also Chairperson of Grameen Koota, said, “As a responsible MFI, Grameen Koota will continue its meaningful work with renewed commitment and reach out to thousands of other unbanked households in the coming years.”

Suresh K Krishna, Co-Promoter & Director of Grameen Koota, echoed similar views when he said, “The success of Grameen Koota is also a demonstration of the need and relevance of microfinance services to the poor and low income households. Grameen Koota will continue to be client centric organization and provide need based microfinance services in a transparent manner. I also thank and recognize the efforts of over 3,000 employees who have been working tirelessly, with the passion to see change in the community.”

Udaya Kumar, Managing Director and CEO of Grameen Koota, said: “We serve with our responsible lending principles along with social focus by providing financial literacy, micro-credit for all their needs, awareness on social, economic, education, health hygiene, water, sanitation etc. Customer Retention of over 90% validates our pro-poor business and social focus.”

Grameen Koota is backed by CreditAccess Asia & Creation Investments Capital Management, MFI focus investors, who have been aligned with vision and mission of the promoters.  Major Private and public sector Banks including Axis, ICICI, IDBI, SIDBI, State Bank of India, among others are the lending partners. Further, Grameen Koota has been supported by international lenders such as Standard Chartered Bank, Blue Orchard, responsAbility, Triodos Investments and others.

Congratulating Grameen Koota on reaching its milestone of one-million customers, Paolo Brichetti, Founder & CEO, CreditAccess Asia, said, “Grameen Koota is a key part of our integrated Group of credit institutions and we are very proud of this excellent result. We have supported the company since 2009 and it has been exciting to support the Management Team of Grameen Koota in this path to impressive growth. Continuing to keep focus on clients’ interests, will ensure that Grameen Koota will reach new milestones.”

Ken Vander Weele, Co-Founder and Partner of Creation Investments, said, “We are very pleased to be a shareholder in Grameen Koota. The Company has been uniquely able to manage rapid growth without ever compromising on the quality of service to its clients or the principles of client protection and care.”

About Grameen Koota Financial Services Pvt Ltd

Grameen Koota is one of the 5 financial institutions in the world and one of the 3 microfinance institutions (MFI) in India to have been honored by Smart Campaign for having met all the client protection principles. It is also one of the few MFIs be awarded with Truelift Certification of ‘Achiever’s level’ by M-CRIL and Social Rating of  Σα-(alpha- minus) for its commitment on social performance and pro-poor business.

Grameen Koota has been working with Joint Liability Groups formed exclusively of women belonging to poor and low income households by providing them with its diverse credit products catering all life-cycle needs such as income generation and access to water, sanitation, education, health care, home repairs, emergency, energy efficient cook stove etc. It gives its clients the option to repay weekly, fortnightly or monthly, depending on their cash flow and convenience.

More information: www.gfspl.in

Photo Caption: Grameen Koota reaches milestone with 1 million microfinance customers, a testimony of its strong client-centric approach. Photo Credit: Vikash Kumar

For News Release background on Grameen Koota click here
Media Contact Details
Udaya Kumar, MD & CEO, Grameen Koota Financial Services Pvt Ltd, +91-9901100889, udayakumar@gfspl.in

http://www.financialexpress.com/article/companies/grameen-koota-reaches-milestone-with-1-million-microfinance-customers/108616/

Creation Strives for Good Returns—and a Better World – MiddleMarketGrowth.org

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Global

Creation Strives for Good Returns—and a Better World

Small things do add up.

Or so it seems for Patrick Fisher and his growing team at Chicago-based Creation Investments Capital ManagementThe private equity firm aims to marry healthy investor returns with a social impact mission to provide microloans to the working poor.

In countries such as Sri Lanka, Albania and Mexico, Creation is scooping up small private financial services organizations to fill in the gaps where traditional lenders don’t have the inclination to tread— providing needed financing to struggling entrepreneurs.

“Big banks have thought, there’s not a lot of money in making a $100 dollar loan because it costs $20 to $50 to make that loan,” says Fisher, the firm’s 36-year-old founder. “If you do it in a certain model, it’s actually very efficient.”

“Big banks have thought, there’s not a lot of money in making a $100 dollar loan because it costs $20 to $50 to make that loan,” says Fisher, the firm’s 36-year-old founder. “If you do it in a certain model, it’s actually very efficient.”

Creation acquires nongovernmental organizations and charity-owned lenders with solid foundations that lack expertise in back-office systems, human resources and business development.

“There’s a need for investors like us that have the real focus and the next skill set,” he says.

Fisher is a former banker whose passion for emerging markets was fueled by a stint in China for JPMorgan. His co-founder, Ken Vander Weele, had nearly two decades of experience in microfinance when they started the firm in 2007. The Chicago staff has grown to eight; in addition, the firm employs representatives in Eastern Europe, Mexico and India.

Creation’s portfolio companies typically help individuals and small businesses obtain working capital—money for purchases that can make a big difference: a tractor to speed harvest, a motorcycle to deliver goods, sewing machines to mechanize production and the like.

“One of the key things here is that these aren’t consumer loans,” Fisher says. “These are loans to individuals and small businesses that are going right into their business.”

 Besides loans, Creation’s portfolio companies offer services such as remittances, microsavings and microinsurance. They operate on nine platforms, serving some 4.5 million entrepreneurs with roughly $1.1 billion in loans outstanding.

Fisher, whose firm has raised $140 million in equity plus debt funding, says his returns are comparable to those of traditional private equity funds. Despite higher levels of risk, the funds are backed by some heavy-hitting institutional investors that decline to be named, as well as families and family offices. Return on equity at Creation’s companies averages about 20 percent.

And Creation is far from finished. Globally, says Fisher, there are thousands of additional financial services organizations ripe for consolidation and capital injections to get to the next level. The firm is looking primarily at growth in “core emerging markets,” such as Brazil, that have stability and a regulatory regime, he says.

“Charities still need to do the early work,” Fisher says. “After a certain point in time, these things do become very compelling investments.”


Patrick_Fisher

A former banker with JPMorgan, Patrick Fisher founded Creation Investments in 2007. He is responsible for overall management of the firm, including deal generation, due diligence, deal structuring and negotiation, along with fundraising, investor relations and portfolio oversight. His background includes work in international banking and global treasury and trade services.

 

 

http://www.middlemarketgrowth.org/creation-strives-good-returns-better-world/

TPG Capital to buy Janalakshmi Financial Services Ltd minority stake for Rs 610 crore ($100 million USD)

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By Baiju Kalesh & Shilpy Sinha, ET Bureau | 13 Oct, 2014, 04.00AM IST

MUMBAI: American private equity fund TPG Capital will purchase a minority stake in microfinance institution Janalakshmi Financial Services Ltd, promoted by former Citigroup Inc banker Ramesh Ramanathan, for Rs 610 crore, two people with direct knowledge of the plan said, signaling renewed interest in the sector by foreign investors after a three-year slump.

“The valuation exercise and the exact stake which will be owned by TPG will be finalised soon,” one of the two persons said. “Janalakshmi is doubling its loan book every two years and is urban-focused unlike other MFIs which are rural-based.” TPG officials declined comment. Janalakshmi MD and CEO VS Radhakrishnan said, “We are not in a position to respond.”

TPG Capital has been investing in Indian financial services companies for the past decade. The PE fund made a sevenfold return from its stake in Shriram Transport FinanceBSE -1.04 % in 2013 and is an investor in Shriram Capital and Shriram City Union Finance.

Bangalore-based Janalakshmi was one of the 26 entities that applied to the Reserve Bank of India last year for a banking licence but it was not given one. Bandhan Financial Services, another microfinance institution, has got a licence to set up a bank. Meanwhile, RBI is working on the guidelines of differential banking licences or small banks.

Some consultants say this is the next step for microfinance institutions. “MFIs believe that the next logical extension is to a small bank,” said Shashwat Sharma, partner at KPMG. “This has caught the imagination of large PE firms and MFIs are going back to the drawing board.”

Janalakshmi had assets of Rs 2,510 crore and reserves of Rs 408 crore at the end of fiscal 2014. It reported a profit of Rs 50 crore in the fiscal.

The MFI has received a steady stream of investments from both local and overseas investors. In August 2013, it raised Rs 325 crore from Morgan Stanley Private Equity Asia, Tata Capital Growth Fund, QRG Enterprises (the holding company of Havells India) and Citi Venture Capital. Private equity investors invested $168 million in this sector in FY13, according to data released by M-FIN, a lobby group for the sector.

 

World Bank Reports That Microcredit Works After All

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The World Bank has released a report that examines microfinance in Bangladesh over the longest period yet studied. The results were quite positive:

The results of the basic model unequivocally show that group-based credit programs have significant positive effects in raising household welfare including per capita consumption, household non-land assets and net worth. Microfinance increases income and expenditure, the labor supply of males and females, non-land asset and net worth as well as boys’ and girls’ schooling. Microfinance, especially female credit, also reduces poverty. The results using long-panel data thus confirm most of the earlier findings that microfinance matters a lot, and more for female than for male borrowers.

….Membership in multiple programs has grown steadily from none to 33 percent in 2010/11….Trading is perhaps now saturated with microcredit loans and households have already started to experience diminishing returns. In such circumstances, households must be assisted through skill training and the development of improved marketing networks to expand activities in more rewarding sectors and beyond the local economy; otherwise, microfinance expansion cannot be sustained. In short, the current microfinance policy of credit expansion alone may not be enough to boost income and productivity, and, hence, sustained poverty reduction.

“Examining the dynamics of microcredit programs in Bangladesh” uses long panel survey data spanning over 20 years to study the effects of microcredit programs in Bangladesh. It uses a dynamic panel model to address a number of issues, such as whether credit effects are declining over time, whether market saturation and village diseconomies are taking place, and whether multiple program membership, which is rising as a consequence of microcredit expansion, is harming or benefiting the borrowers. The paper makes the following observations:

•          Group-based credit programs have significant positive effects in raising household welfare including per capita consumption, household non-land assets and net worth;

•          Microfinance increases income and expenditure, the labor supply of males and females, non-land asset and net worth as well as boys’ and girls’ schooling;

•          Microfinance, especially female credit, reduces poverty;

•          Past credit has a higher impact on income and expenditure than current credit;

•          With higher village-level aggregate current male borrowing, the marginal effect of male borrowing on per capita income gets lower.

The paper concludes that the current microfinance policy of credit expansion alone may not be enough to boost income and productivity, and, hence, sustained poverty reduction.

Investors Pouring More Into Impact Investments – JPMorgan

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MAY 7, 2014

J.P. Morgan survey finds financial returns and impact satisfy most investors

Microfinance is the fastest growing sector of social impact investing.Microfinance is the fastest growing sector of social impact investing.

Institutional investors expect to commit 19% more capital to impact investments in 2014 than they did last year, according to a recent survey by J.P. Morgan and the Global Impact Investing Network.

Survey participants — 125 fund managers, banks, foundations development finance institutions and pension funds around the world — expected to allocate $12.7 billion this year, and anticipated a 31% increase in the number of deals.

Their fundraising target in 2014 is $4.5 billion, compared with a $2.8 billion target last year.

The survey, the fourth in a series, encompassed the largest-ever respondent group, up 26% this year from 2013, J.P. Morgan and GIIN said in a statement.

“From the results, we see the rise of a vibrant impact investing marketplace, where investors are targeting a wide variety of social, environmental and financial objectives and finding themselves satisfied with the results,” Yasemin Saltuk, research director at J.P. Morgan Social Finance, said in the statement.

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“As collaboration between investors, governments and other key participants continues in 2014, we remain optimistic about the growth and development of the practice.”

Asset Allocations

The survey found that respondents collectively managed $46 billion in impact investments, 70% of which was invested in emerging markets and 30% in developed markets.

Development finance institutions managed 42% of total assets, and fund managers 34% of total assets.

Microfinance and other financial services each accounted for 21% of respondents’ impact investment assets, followed by energy at 11% and housing at 8%.

Allocations took place primarily in private markets, with 44% of assets currently invested through private debt and 24% through private equity.

More investors said they planned to increase the percentage of their portfolios invested in sub-Saharan Africa, Asia and North America, relative to other regions.

In addition, more investors planned to increase the percentage of their portfolios allocated to food and agriculture, health care and financial services (excluding microfinance).

The largest number of investors planned to reduce the percentage of their portfolios allocated to microfinance, relative to other sectors.

Investor Motivation and Measurement

Ninety-one percent of investors surveyed reported financial returns above or in line with their expectations, and 99% said the same about social and/or environmental impact.

More than half of investors acknowledged they were seeking competitive financial returns from their impact investment commitments.

Investors said they were chiefly motivated to make impact investments by responsibility, efficiency and client demand.

Shortage of quality deals and lack of appropriate capital remained their top challenges, they reported.

According to the survey, 95% of respondents reported that they used metrics to measure the social and/or environmental impact of their investments. And more than two-thirds said standardized impact metrics were important to the growth of impact investing.

Commercial Credit and Finance PLC receives Rs. 1.68 billion: the Largest International PE Investment into a Sri Lankan LFC from Creation Investments

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FOR IMMEDIATE RELEASE

Commercial Credit and Finance PLC receives Rs. 1.68 billion: the Largest International PE Investment into a Sri Lankan LFC from Creation Investments

February 26, 2014 Chicago, IL USA – Leading emerging markets private equity investor, Creation Investments Capital Management LLC, through Creation Investments Social Ventures Fund II L.P. (collectively, “Creation”), has agreed to invest Rs. 1.68 billion (US$12.4 million equivalent) into one of Sri Lanka’s leading finance companies, Commercial Credit and Finance PLC (“CCF”). The transaction will involve the issuance of 80 million new shares for a consideration of Rs. 1.68 billion or approximately 25.15% of CCF. The transaction has received the necessary CBSL, SEC and CSE approvals and will be completed subject to shareholder approval.

 

This is the largest investment by an international private equity fund into a publicly listed Sri Lankan licensed finance company and is a strong validation for the success of CCF. Creation is impressed by the strength of CCF’s leadership and commitment to the mission toward serving the under-banked population in Sri Lanka. The new funds will be used by CCF for its future investment activities including further enhancing its branch network and expanding its asset and client base, and to meet the future capital adequacy requirements of the Company.

 

Creation has invested in many banks and finance companies across emerging markets and its investment into CCF will help provide guidance and support to CCF and promote best practises from its other international portfolio investments. The new equity investment will also strengthen the capitalisation of CCF and enable it to access international debt capital at attractive rates.

 

Roshan Egodage, CEO of CCF, commented on the transaction, “we are committed to providing a wide range of financial products to the Sri Lankan consumer including a variety of microfinance and SME products combined with a high quality service which is part of our core values. Our partnership with Creation will enable us to continue this journey and grow the company towards becoming Sri Lanka’s leading licensed finance company”.

 

Patrick Fisher, Managing Partner and Founder of Creation, added that “this is our first investment in Sri Lanka and the largest investment that we have made to date across our Creation Investments Social Venture Funds. We look for quality investment opportunities across many emerging and frontier markets globally. CCF exemplifies what we look for in prospective investments – market leadership, exceptional management, and alignment in the mission, vision and values. CCF is a leader in the Sri Lankan LFC sector given its tremendous growth in the past few years. We are excited to partner with the CCF team in supporting their future growth plans”.

 

Creation Investments Capital Management LLC

Creation Investments Capital Management LLC is a Chicago-based private equity firm founded in 2007 with over US$130 million under management. Its investor base includes Fortune 100 Banks, Insurance Companies, Hedge Funds, Family Offices and High Net Worth Individuals. Creation has invested in a number of financial services companies in emerging markets such as India, Mexico and Russia.

 

About Commercial Credit and Finance

Commercial Credit and Finance PLC is one of Sri Lanka’s leading finance companies with an asset base of Rs. 25.8 billion (US$198.5 million equivalent) and is listed on the CSE. CCF has a wide range of financial products including an innovative portfolio of SME and Micro products, including classic microfinance, working auto leasing, education loans, microsavings and Islamic banking, which are distributed to over 535,000 customers through 74 branches across the island. CCF has won countless awards including Gold Award for Service Brand of the Year (2012) and Excellence in Corporate Social Responsibility (2013), among many others. CCF maintains a rating of BB+ from RAM Ratings and has a reported ROE of 45.7%  as of December 31, 2013.

Commercial Credit and Finance PLC receives Rs. 1.68 billion from Creation Investments: the Largest International PE Investment into a Sri Lankan LFC

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Leading frontier markets private equity investor, Creation Investments Capital Management LLC (“Creation”), through its wholly owned subsidiary, Creation Investments Sri Lanka LLC (“Creation Sri Lanka”), has agreed to invest Rs. 1.68 billion (US$12.4 million equivalent) into one of Sri Lanka’s leading finance companies, Commercial Credit and Finance PLC (“CCF”). The transaction will involve the issuance of 80 million new shares for a consideration of Rs. 1.68 billion or approximately 25.15% of CCF. The transaction has received the necessary CBSL, SEC and CSE approvals and will be completed subject to shareholder approval.

 

This is the largest investment by an international private equity fund into a publicly listed Sri Lankan licensed finance company and is a strong validation for the success of CCF. Creation is impressed by the strength of CCF’s leadership and commitment to the mission toward serving the under-banked population in Sri Lanka. The offered price at a significant premium to the trading value and NAV indicates strong future growth potential for the company. The new funds will be used by CCF for its future investment activities including further enhancing its branch network and expanding its asset and client base, and to meet the future capital adequacy requirements of the Company.

 

Creation has invested in many banks and finance companies across emerging markets and its investment into CCF will help provide guidance and support to CCF and promote best practises from its other international portfolio investments. The new equity investment will also strengthen the capitalisation of CCF and enable it to access international debt capital at attractive rates.

 

York Street Partners (Pvt) Ltd. acted as Sole Financial Advisor to the transaction. Varners was the Legal Advisor to CCF and FJ&G De Saram was the Legal Advisor to Creation.

 

Roshan Egodage, CEO of CCF, commented on the transaction, “we are committed to providing a wide range of financial products to the Sri Lankan consumer including a variety of microfinance and SME products combined with a high quality service which is part of our core values. Our partnership with Creation will enable us to continue this journey and grow the company towards becoming Sri Lanka’s leading licensed finance company”.

 

Patrick Fisher, CEO of Creation, added that “this is our first investment in Sri Lanka and the largest investment that we have made to date across our Creation Investments Social Venture Funds. We look for quality investment opportunities across many emerging and frontier markets globally. CCF exemplifies what we look for in prospective investments – market leadership, exceptional management, and alignment in the mission, vision and values. CCF is a leader in the Sri Lankan LFC sector given its tremendous growth in the past few years. We are excited to partner with the CCF team in supporting their future growth plans”.

 

“This was a complex transaction that required careful negotiation through several structured options as well as regulatory approvals”, Sujendra Mather, MD at York Street Partners said reflecting on the transaction. He further added, “we are delighted to see the successful outcome of this transaction which is truly a win-win for both CCF and Creation and comes at an opportune moment when several key changes are taking place in the financial services landscape in Sri Lanka”.

 

About Creation Investments Capital Management LLC

Creation Investments Capital Management LLC is a Chicago-based private equity firm founded in 2007 with over US$130 million under management. Its investor base includes Fortune 100 Banks, Insurance Companies, Hedge Funds and High Net Worth Individuals. Creation has invested in a number of financial services companies in emerging markets such as India, Mexico and Russia.

 

About Commercial Credit and Finance

Commercial Credit and Finance PLC is one of Sri Lanka’s leading finance companies with an asset base of Rs. 24.5 billion as at December 31, 2013 and is listed on the CSE. CCF has a wide range of financial products including an innovative portfolio of SME and Micro SME products which are distributed to over 400,000 customers through 60 branches across the island. CCF has a rating of BB+ from RAM Ratings.

 

 

Impact Investing Helps Advisors Stay Ahead Of The Curve – FA

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MARCH 20, 2013 • TIM FREUNDLICH

Financial advisors take note: your impact investing offerings will soon define whether you are ahead of the curve or whether you will be trying to catch up in years to come. JP Morgan’s recent Perspectives on Progress report, released in partnership with the Global Impact Investing Network (GIIN), found that impact investing among the fund managers interviewed will grow 12.5 percent to reach $9 billion in 2013.

But it’s just the sector’s expected growth that’s important, it’s how the shifting mindset of clients is already changing the landscape for financial advisors.

Last year’s Gateways to Impact survey of financial advisors found that nearly half of them already have clients engaged in sustainable investing, while 72% of advisors expressed interest in recommending sustainable investments to their clients.

“We’ve seen firsthand the growing interest in investments that have both financial and social ROI,” says Kathy Leonard, a financial advisor with UBS Financial Services and head of the Boulder, Colo.-based Leonard Social Investment Group,. “Impact investing has emerged as the dominant global trend that will drive future financial market opportunities.”

While the term “impact investing” is relatively new, it’s based on more than 40 years of evolution in socially responsible investing. Impact investments are investments made into organizations and funds that generate measurable social and environmental impact as well as financial returns.

Going beyond the definition, impact investing is about investor intention to create real and measurable positive outcomes for the world. As individuals seek “blended value” investment options that combine economic and social value creation, and as fund managers develop track records that support the claim of a range of positive outcomes including––but not limited to––market rate returns, impact investing is poised to attract significant capital going forward.

To successfully direct a portfolio of investments to achieve its full potential, investors must do two things:

• First, they and their wealth managers must reconceive the overall investment strategy to allow for consideration of more than just financial performance.

• Second, investors need a more comprehensive understanding of, and access to, the array of investment instruments available to them to construct their portfolios.

For financial advisors who are ready to incorporate impact investing, here are some tactical ways to get started:

Become more knowledgeable about the field. Several resources are readily available, including:

• The Global Impact Investing Network (GIIN) is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing. Their website includes an online impact investing resource center that features research, news clippings, events, useful links, and GIIN publications about impact investing.

• The ImpactAssets 50 is a screened roster of private debt and equity fund managers offering impact investment strategies across a variety of asset classes, issue areas, and geographic areas. The IA 50 is available online at www.impactassets.org and focuses on filtering for track record and commitment to impact investing at the firm level and is a starting place for investors and their advisors who are looking for credible firms across thematic areas of impact investing.

• Impact Investing: Transforming How We Make Money While Making a Difference, co-authored by Jed Emerson and Antony Bugg-Levine, is the first book on the topic of impact investing and charts the growth of the field while explaining the “blended value” proposition for investors, funders, and entrepreneurs.

Know what is available to your clients:

• Find out if your firm offers sustainable investment products. These may be ESG (environmental, social, governance) or socially responsible mutual funds, community development bond funds, or Calvert Foundation’s Community Investment Note.

• Identify a community development bank in your area. Using these institutions for basic checking and savings can be an easy first step to put a client’s money to work for positive local impact.

• For clients with philanthropic capacity, there are donor-advised funds such as ImpactAssets’ Giving Fund that specialize in impact investing and offer a range of private debt and equity impact investment options. These funds interface directly with financial advisors, allowing them to maintain management of assets.

• Talk to peers who have been helping clients incorporate impact investing into their portfolios and learn from their experiences.

Talk with your clients:

• By asking your clients about their interests and overall portfolio objectives you can determine if impact investing is a good fit and if so, what kinds of products will align with their interests.

• Discuss your client’s comfort with liquidity or lack thereof, intended impact area and/or geographic focus, and their expected risk and return to help narrow the field of appropriate impact investments.

Rather than investing capital for simple financial returns, an investor engaged in pursuit of multiple returns will need to be directly involved in working with his or her asset managers to ensure that their portfolio reflects the desired impact strategies. And asset managers and advisors will increasingly provide leadership to their clients in constructing solutions that meet this appetite.

Impact investment approaches are gaining momentum and will be the baseline for the next generation of investors. This year that will see impact investing expand beyond high-net-worth investors and have a greater presence among mainstream retail investors.

Financial advisors who are receptive and informed when clients seek a broader definition of ROI will be positioned to take advantage of this growing market opportunity and will go a long way in ‘future proofing’ their client relationships.

 

Tim Freundlich is president of ImpactAssets, a nonprofit financial services firm that increases the flow of capital into investments that deliver financial, social and environmental returns. Its impact investment strategies, donor-advised fund and knowledge resources provide a dynamic platform for wealth managers and the clients they serve to advance social or environmental change through investment. ImpactAssets seeks to shed light on—and drive capital to—the field’s most promising organizations and initiatives, helping to build the field of impact investing.

 

http://www.fa-mag.com/news/impact-investing-helps-advisors-stay-ahead-of-the-curve-13694.html

Grameen Koota raises $10 million USD (or 532 million INR) in its 3rd round of equity funding lead by Creation Investments

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Grameen Koota raises $10 million USD (or 532 million INR)
in its 3rd round of equity funding lead by Creation Investments

February 27, 2013 – Bangalore, India: Grameen Financial Services Pvt Ltd (GFSPL), popularly know as Grameen Koota today announced its third round of equity funding of $10 million USD (or 532 million INR) lead by Creation  Investments Capital Management (Creation Investments Social Ventures Fund II, L.P. USA.  Two current investors also invested in this round – Incofin Investment Management (IIM Impulse 2, Mauritius) and MicroVentures (MVHS.p.a, Italy and MV SICAR, Luxembourg).

GFSPL has been working with poor and low-income households for the past 13 years and has provided these households with diverse financial and developmental services that caters to all life-cycle needs of its over 350,000 clients spread across three states of Karnataka, Maharashtra and Tamil Nadu. The equity  funding comes close at the heels of the instiution receiving $3.9 million USD (or 210 million INR) in debt funding through unsecured, redeemable, non-convertible debentures (NCDs) from Global Commercial Microfinance Consortium II B.V., Netherlands, a fund managed by Deutsche Bank.

Speaking on the new equity infusion, GFSPL Managing Director Suresh Krishna, said “The newly infused funding will add to the growth of the company and help Grameen Koota achieve its target of reaching out to over 10 lakh poor and low income households.  The capital will also strengthen our vision towards extending and expanding our loan operations to other neighbouring states.”

GFSPL understands that micro-lending cannot happen in isolation and therefore has rigourously engaged in social development activities including entrepreneurial education, health, sanitation, etc. Commenting on the equity raised, Founder-Chairperson, GFSPL  Vinatha Reddy,  added “Ours has been a constant endevour towards being a well run MFI with a firm social purpose and we are happy that existing investors have reposed their faith in Grameen Koota’s work by increasing their stake, as we welcome Creation Investments, our new investor. ”

For Creation Investments, the equity funding is just the beginning of a long relationship with GFSPL. Speaking about the capital infusion, Creation Investments co-founder/director Ken Vander Weele said  “We are excited in partnering with a leading MFI like Grameen Koota that has brought about innovative loan products and are constantly evolving themselves to cater to the financial needs of the poor in India.“

Paolo Brichetti, Chairman of MicroVentures, a veteran in the social capital investment space in developing countries such as India, believes that the equity raised will only benefit the company and further enhance its activities towards accomplishing its  vision. He said, “Our relationship with Grameen Koota has deepened a further notch and we are glad that we continue to back an MFI like Grameen Koota that continues to remain a benchmark within the Indian Microfinance sector.”

Speaking on the follow-on investment in GFSPL, Aditya Bhandari (Regional Director, Incofin South Asia) stated “Grameen Koota’s instant brand recall amongst clients and its strong focus on client relationship makes it as one of the best MFIs in the world. We are excited to once-again support GFSPL in its vision to create long term sustainable value for all stakeholders (clients included).”

About Grameen Financial Services Private Limited:

Grameen Financial Services Private Limited (GFSPL), a microfinance institutions headquartered in Bangalore, popularly known as Grameen Koota has over 350,000 clients with 1300 employees working out from 168 branches in Karnataka, Maharashtra and Tamil Nadu. It had loan outstanding of about $84 million USD (or 4.5 billion INR). Being socially focused Microfinance Institutions; Grameen Koota has over a decade of experience in micro lending towards Joint Liability Groups formed exclusively of women from poor and low income households with other support products like Water, Sanitation, Health Care, Energy Efficient Cook Stove etc. For more information, visit www.gfspl.in

About Creation Investments Capital Management

Creation Investments is an alternative investment management company with over $100 million in assets under management. Named a leading Impact Investment fund manager by ImpactAssets50 in 2011, Creation Investments Capital Management, LLC currently manages 4b Capital Fund A, L3C, Creation Investments Social Ventures Fund I, and Creation Investments Social Ventures Fund II, with a focus on private equity and control equity investments in Microfinance Institutions, Small-and-Medium Enterprise lenders, BOP Financial Services Providers, and other Social Ventures in emerging markets seeking to maximize financial and social returns on investment. Investments in microfinance and social ventures create opportunities through access to capital and needed products and services for those living in poverty to engage in small-business activity, income generation, and significantly impact those living at the bottom of the economic pyramid.

About MicroVentures

The MicroVentures initiative was started-up in Italy by a group of private social entrepreneurs with previous experience in the field of social venture capital and business cooperation with the Developing Countries. The initiative has gradually expanded into an international network of affiliates, which includes the Bangalore-based MicroVentures India (specialized in providing debt to indian MFIs), Bina Artha Indonesia and  MicroVentures Investments SICAR, a specialized investments fund based in Luxembourg, which provides equity  and debt financing to promising Microfinance Institutions in Asia and Latin America.

About Incofin Investment Management

Incofin Investment Management (www.incofin.com) is a specialized fund management company with more than 10 years of experience in microfinance and currently more than 350 M EUR assets under management. Incofin IM manages the following funds and facilities: Incofin CVSO (40 M EUR), Impulse (46 M EUR), Volksvermogen (10 M EUR), VDK (75 M EUR), Rural Impulse Fund I (30 M EUR), Rural Impulse Fund II (120 M EUR), BIO (10 M EUR) and Fair trade Access Fund (20 M EUR). Investors are mainly Western Europe and US based, including ~50% public investors (DFIs such as IFC, KfW, EIB, FMO, BIO etc) and ~50% private (institutional investors such as banks, pension funds etc). The total investment portfolio includes over 100 MFIs in more than 44 countries around the world. Incofin IM has a strong track record, having executed more than 566 transactions since 2003.

 

http://in.reuters.com/article/2013/03/06/grameen-koota-raises-10m-round-led-by-cr-idINDEE92504P20130306

 

http://www.legallyindia.com/201303043483/Private-equity-/-VC/tatva-jsa-on-us-social-vc-s-7m-pe-in-indian-mfi-grameen

 

http://www.ivcpost.com/articles/6926/20130306/grameen-koota.htm

 

http://www.thehindubusinessline.com/companies/grameen-koota-raises-rs-5320-cr-equity-fund/article4482251.ece

 

http://www.thehindubusinessline.com/industry-and-economy/banking/grameen-koota-raises-over-rs-53-cr-in-third-round-of-funding/article4479058.ece

 

http://articles.economictimes.indiatimes.com/2013-03-05/news/37469982_1_incofin-grameen-koota-microfinance-firm

 

http://www.altassets.net/private-equity-news/by-news-type/deal-news/creation-investments-leads-10m-grameen-equity-financing.html

 

http://blogs.ft.com/beyond-brics/2013/03/08/india-hint-of-recovery-in-microfinance/#axzz2N14VCTtL

$9 Billion To Flow Into Impact Investments In 2013

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JANUARY 22, 2013 • 

According to research from J.P Morgan and The Global Impact Investing Network, $9 billion will be committed to impact investments this year. That would represent a 12.5% boost from the $8 billion that flowed into the space in 2012, the research shows.

Impact investments aim to produce a financial return while providing a positive impact through projects such as alleviating poverty, promoting human rights, engendering fair trade, or improving the environment.

The current research, culled from a survey last year of 99 active impact investors, found that most respondents said the financial and impact performance of their investments are in line with expectations. Nearly two-thirds of the sample said they shoot for market rate financial returns on their impact investments.

Half of those surveyed are fund managers who expect to make 10 impact investment transactions this year.

Most of the investments will be made in the food and agriculture sector, according to the survey, with sub-Saharan Africa receiving the largest share of total capital committed (34%). Latin American and U.S. companies will receive the next largest share (32%).

In developed market economies such as the U.S., healthcare companies will receive the most investment dollars.

Most investments (78%) are being made in growth-stage companies, with less than 20% in seed/startups and just over half in venture-stage organizations. Thirty-three percent of investments are headed for bigger and more established private companies, while nearly 10% of investments will be made in publicly traded stock.

Interestingly, 83% of the respondents said they make impact investments via private equity instruments. Conventional wisdom held that private impact investments made in the developing world were largely credit, or debt-driven because of risk and recourse measures.

After private equity, the next largest investment vehicles of choice among survey respondents were private debt (66%) and equity-like debt (44%).

Despite numbers showing a slow-building momentum in the impact investing space, respondents said the top challenges to growth were “lack of appropriate capital across the risk/return spectrum” and “shortage of high quality investment opportunities with track record.”

To help promulgate impact investing, those surveyed said governments can help grease the skids by providing technical assistance, tax credits, guarantees, better regulation, co-investment opportunities and procurements.

Metrics and standards are also important to fuel industry growth. Seventy percent of those surveyed believe standardized investment metrics are key to the development of the impact investing industry.

As more traditional investors consider impact investments (“many” investors, especially among high-net-worth people and family offices, are starting to consider the impact investment market, according to the survey), standards and risk measurements will become increasingly important.

The overall takeaway from the survey is that impact investing has moved past the “fad” stage and is maturing into a more fully realized segment of the financial services industry. With Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse and others launching more robust impact investment programs, and with operators such as TriLinc Global advancing in the independent financial advisor market, mainstream funds and program offerings are sure to follow.

That means even more growth in the coming years.

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