Belgium-headquartered impact investor Incofin Investment Management said Thursday its India Progress Fund has hit the first close at Rs 450 crore ($60 million).
A first close is a fundraising milestone after which private investment firms start deploying the capital.
The firm said limited partners to the fund include the UK’s CDC Group Plc and French development finance institution Proparco. Belgian Investment Company for Developing Countries (BIO) and several Belgian family offices and foundations including Korys, the private investment arm of the Colruyt family, also invested.
Incofin didn’t specify the final target for the fund, but a 2018 report by The Economic Times pegged it at $80 million.
The new fund will invest Rs 25-70 crore to pick up minority stakes in companies operating in the agriculture food value chain and financial services segments in rural India. It will also mentor entrepreneurs and provide them access to Incofin’s global network.
“The modernisation of the agricultural value chain and rural financial inclusion is an underinvested opportunity in India with significant potential for rural impact and for creating meaningful enterprises,” said Rahul Rai, partner at Incofin.
Aditya Bhandari, also a partner at Incofin, added that the firm has “first-hand practical” rural market experience in India having being operating here for 13 years.
“Success from microfinance shall be carried forward to the large unmet missing middle. IPF shall back entrepreneurs aiming to challenge the status quo, in the process to transform from informal to formal market setup,” Bhandari said.
Incofin has previously backed several Indian microlenders including Fusion Microfinance, Annapurna Finance and Light Microfinance. It has also invested in Sohan Lal Commodity Management, a farm logistics and warehousing company.