The DFID Impact Fund, which is managed by CDC, has made its first investment in South Asia. CDC has committed US$10 million of DFID’s capital to the Insitor Impact Asia Fund which, in turn, will make investments in Myanmar, Cambodia, India and Pakistan.
Insitor will back promising businesses in these countries that provide essential goods and services to low-income households in sectors such as education, agriculture, energy and healthcare, where there is a large, unmet demand. Lack of early-stage capital is a key barrier to growth of such businesses in Insitor’s target geographies, especially Pakistan and Myanmar.
Insitor’s first investment since receiving CDC’s capital is in EduBridge, a company that provides low-cost education and training to transform the lives of unemployed youth in rural and semi-urban areas of India. The funds will be used to expand operations to Gujarat, Odisha, Jharkhand and Bihar, and to strengthen their existing businesses.
Insitor will primarily make equity investments in early and growth stage companies across these markets. The Insitor fund has also received backing from one family office and one High Net Worth Individual from Europe, and is currently pursuing other sources of capital, both public and private, in order to raise a total fund size of US$40million. In order to attract private investors to the Fund, CDC would provide a pre-defined amount of loss coverage to investors that meet pre-defined criteria.
Through the DFID Impact Fund, CDC is investing £75 million of DFID’s long term, “patient” capital in impact investment funds that invest in enterprises which serve the poor as consumers, producers, suppliers or employees. The DFID Impact Fund’s other investments are Novastar Ventures, Injaro Investments Ltd and Energy Access Ventures Fund.
For more information on the DFID Impact Fund go to: www.theimpactprogramme.org.uk/dfid-impact-fund/
For more on EduBridge go to: www.edubridgeindia.com/
CDC Group plc is the UK’s development finance institution. Wholly owned by the UK Government, it invests in sub-Saharan Africa and South Asia with the aim of supporting economic development to create jobs. CDC takes a flexible approach and provides capital in all its forms, including equity, debt, mezzanine and guarantees, to meet businesses’ needs and achieve development impact. CDC has net assets of £4.8bn.