Key Takeaways
- • The International Finance Corporation (IFC), the World Bank's private-sector investment arm, has proposed an equity investment of up to $10 million in ECF Fund III LP, according to an investment proposal seen by CrowdFund Insider.
- • ECF Fund III LP is seeking $150 million in total commitments to provide growth capital to financial institutions offering sustainable finance to MSMEs and individuals in India.
- • The fund expects to invest $10 million to $20 million in each of approximately eight financial institutions focused on lower-income segments and MSMEs.
- • Encourage Capital Management LLC will manage the fund, with a general partner, Encourage GP LP, both controlled by Encourage Capital LLC; the vehicle is proposed as an Ontario limited partnership.
- • The IFC commitment remains under consideration rather than a completed transaction, and is expected to help the fund reach its first close.
Summary
The International Finance Corporation (IFC), the World Bank's private-sector investment arm, has proposed an equity investment of up to $10 million in a private equity fund targeting financial institutions that provide sustainable finance to small businesses and individuals in India. The fund, ECF Fund III LP, is seeking to raise $150 million in total commitments, according to the investment proposal seen by CrowdFund Insider.
The fund plans to provide growth capital to financial institutions offering sustainable finance solutions to micro, small and medium-sized enterprises (MSMEs) and individuals. It expects to invest $10 million to $20 million in each of approximately eight financial institutions, with a focus on providers serving lower-income segments and MSMEs as they expand their sustainable finance offerings.
Encourage Capital Management LLC will manage the fund. A general partner to be established as Encourage GP LP will oversee the limited partnership, and both entities will be controlled by Encourage Capital LLC. The fund is proposed to be organised as a limited partnership under the laws of Ontario, Canada.
According to the proposal, the investment is intended to widen access to financing for smaller businesses and individuals in India and support job creation by helping financial service providers scale sustainability-focused solutions. The structure is also intended to demonstrate a private equity model for backing financial institutions serving these segments, which could encourage other managers to raise new or follow-on sustainability-focused private equity funds in the country.
IFC's proposed commitment, alongside investments from other backers, is expected to help the fund secure its first close. IFC's participation could also give prospective investors greater confidence in the fund's ability to scale its model and incorporate IFC's environmental, social and governance policies into its operations. The proposed investment remains a commitment under consideration rather than a completed transaction.
The fund plans to provide growth capital to financial institutions offering sustainable finance solutions to micro, small and medium-sized enterprises (MSMEs) and individuals. It expects to invest $10 million to $20 million in each of approximately eight financial institutions, with a focus on providers serving lower-income segments and MSMEs as they expand their sustainable finance offerings.
Encourage Capital Management LLC will manage the fund. A general partner to be established as Encourage GP LP will oversee the limited partnership, and both entities will be controlled by Encourage Capital LLC. The fund is proposed to be organised as a limited partnership under the laws of Ontario, Canada.
According to the proposal, the investment is intended to widen access to financing for smaller businesses and individuals in India and support job creation by helping financial service providers scale sustainability-focused solutions. The structure is also intended to demonstrate a private equity model for backing financial institutions serving these segments, which could encourage other managers to raise new or follow-on sustainability-focused private equity funds in the country.
IFC's proposed commitment, alongside investments from other backers, is expected to help the fund secure its first close. IFC's participation could also give prospective investors greater confidence in the fund's ability to scale its model and incorporate IFC's environmental, social and governance policies into its operations. The proposed investment remains a commitment under consideration rather than a completed transaction.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.