IFC likely to invest $15 mn in Mumbai PE fund

International Finance Corporation (IFC), the lending arm of World Bank, is planning to invest around $15 million (around Rs 66 crore) in Aavishkaar Goodwell India Microfinance Development Company II (Aavishkaar Goodwell II), a 10-year-old private equity (PE) fund which supports enterprises active in the microfinance sector in India.

It may be noted Aavishkaar Goodwell II is planning to raise $100 million (around Rs 440 crore).

Aavishkaar Goodwell II is a follow-on fund sponsored by the Indian-Dutch joint venture of Aavishkaar and Goodwell Microfinance Development Co (Goodwell). Aavishkaar was founded in 2006 as an India-dedicated PE management company, while Goodwell was founded in 2004 as a social investment firm focused on high impact and high return investment solutions.

The fund will be managed by AGI Services, which is led by five partners based out of India and the Netherlands.

The project is a proposed equity commitment of up to $15 million, not to exceed 20 per cent of the fund’s total commitments, according to IFC.

Aavishkaar Goodwell II will focus on financing low-income families in rural areas and low-income states, provide support to a local emerging fund manager for expanding reach to new geographies, develop commercial proof of concept for MFI funding model, and invest in growth companies that are expected to create economic benefits and employment opportunities for a community.

“IFC’s support will put a stamp of approval and allow the fund to reach a viable first closing,” according to IFC’s project details note.