The USD 25 million (INR 196 crore) funding round in Light Microfinance was led by British International Investment (BII) with existing investors Incofin, Nordic Microfinance Initiative and Triple Jump. Light Microfinance is one of the fastest growing MFIs in India and aims to provide responsible financial services for low-income families excluded from the financial system in India, using a strong technology platform. It reaches over 200,000 clients, exclusively women in rural and semi-urban areas.

Chauhan is one of those women. She has been a member of Light Microfinance for over five years. As the primary wage earner of a six-member family, she was in dire need of income augmentation. She didn’t start in cattle rearing, but with the first of her loans from Light Microfinance, she started vegetable farming. Eventually, her business acumen enabled Chauhan to expand. Her income increased and she has even planned to hire two employees.

This new funding will be used for geographical expansion into new states to diversify the company’s product lines and continued investments in technology and digital initiatives. Co-founder and Managing Director of Light Microfinance, Deepak Amin, comments: India continues to see a huge demand for financial services, especially in rural India as households try to recover from financial difficulties faced by them due to the pandemic and at the same time get integrated into the mainstream Indian economy. Light Microfinance aims to be a key pillar of this growth story by delivering timely, high-quality financial services to its customers.

Sahyadri Farms Post Harvest Care Limited raised Rs. 310Crs (almost EUR 40 million) growth capital from a group of impact-focused investors. Incofin, Korys, FMO and Proparco see Sahyadri Farms well-placed to help farmers run their businesses in a more profitable and sustainable way.

India is a country with an aspirational, young population (74% of the population is younger than 45 years) focused on enriching their lives through hard work and entrepreneurship. At the same time, the country faces challenges like inequality (gender, education, family wealth), outdated technology, inefficient supply chains, and a lack of access to capital. The country is witnessing a strong movement towards entrepreneurship to help solve these multidimensional problems the country faces.

Sahyadri Farms is a good example of rural entrepreneurship providing end to end solutions to small and marginal farmers.

In 2010 a group of 10 farmers took the initiative to collectively produce and export fresh grapes to Europe. That initiative has grown into the leading fruits and vegetable export and processing company that Sahyadri Farms is today, servicing over 18,000 farmers, covering more than 31,000 acres and 9 crops. The company walks with its farmers from their choice of crops to the farming practices they employ, from the inputs they use to how they harvest and sell their agricultural products. The company for example offers a digital platform that informs farmers on high yield crop varieties, farm inputs, real time climate information and access to the market place.

The economic and social impact of Sahyadri for these farmers is significant. Namdeo Pawar is one of them: “In 2012, I was on the verge of selling my land. Sahyadri supported me, helped me get back up, and I pushed myself to return to work. Trough Sahyadri, my income increased. In 2014, I even repaid my bank loan.” Also for farmer Anil Dawre working with Sahyadri Farms brought about a turnaround: “I farm on less than one acre, because a part of my land is taken up by my home and an animal shed. Group farming turned out to be a success. My parents never imagined their son’s produce would travel abroad. Their joy knows no bounds.”

The capital coming from Korys, FMO, Proparco and Incofin is intended to further grow the farmers company. Sahyadri Farms wants to expand its processing capacity for fruits and vegetables-based products, set up a biomass plant to generate electricity from process waste and enhance its infrastructure, like warehouses. These investments will in turn support rural entrepreneurs working in the Sahyadri network to help overcome local challenges and make agricultural farming a viable and sustainable business.

Vilas Shinde, founder of Sayhadri

“The idea of Sahyadri Farms is to unite farmers and make them think like professional entrepreneurs. We are building a sustainable, scalable, and profitable organization for all our stakeholders by making farming profitable and viable activity for each small and marginal farmer.”Vilas Shinde, founding farmer and Managing Director of Sahyadri Farms.

Alpen Capital acted as exclusive strategic advisor to Sahyadri Farms for this transaction.

Rahul Rai, Partner at Incofin India: “Incofin feels privileged to lead this investor consortium and for its partnership with Sahyadri Farms to support their spread as a global role model of a partnership-based approach to farming that results in sustainable financial impact, climate change adaptation and inclusive growth in rural communities while creating a technology-driven, globally competitive business.”

 

 

Incofin Investment Management invests USD 2.1 million in the Ningxia Dongfang Huimin Microfinance Corp. Ltd (Huimin) equity through its agriculture-focused fund agRIF. As a shareholder, Incofin wants to support Huimin scale their financial services outreach to female smallholder farmers in Ningxia, one of the poorest provinces of China. Additionally, the Danish development financial institution IFU joined this round of capital increase and invested as well USD 2.1 million in Huimin.

The Ningxia region faces extreme aridity and barren soil. The harsh natural environment causes slow economic development and high poverty rates. In particular, rural women in Ningxia have historically been faced with a low social status and are often confined to their housework. Despite their challenges, they are eager to be respected and integrated into society – this is where Huimin came in. Founded in 1996, Huimin was originally set up as an NGO with the mission to reduce poverty by transforming the rural female population into economically active agents using microcredit. Targeting the poorest segment of the population, Huimin’s average loan size is only USD 3,500, about one-third of China’s GNI per capita. As Huimin grew in size and in professionalism, the conviction that sustainable impact is predicated on financial sustainability and good governance became increasingly convincing. In 2007, Huimin successfully transformed into a for-profit microcredit company, while keeping intact its commitment to rural poverty alleviation.

Huimin is among the leading institutions that adapted the Grameen lending methodology to service the Chinese rural demographic. Farmer families connect with each other to create a guarantee team, and these teams in turn form a village-level credit group. Over the years, Huimin has significantly expanded its scale of operation. Through its network of 11 branches and subsidiaries, Huimin now serves over 14,000 clients, all of whom are rural residents and of which 97% are female.

The success of Huimin stems from their holistic poverty alleviation and rural development strategy, which combines inclusive financial services with non-financial activities, such as workshops on agricultural techniques, anti-desertification initiatives and cultural activities to build female clients’ self-confidence.

Dina Pons, Partner at Incofin and Shareholder Representative of agRIF, said: “Huimin’s commitment to providing inclusive financial services and capacity building activities to low-income female farmers is well aligned with agRIF’s mandate. We are pleased to contribute to the sustainable growth of Huimin and to support its efforts in scaling its impactful work.”

Long Zhipu, Huimin’s Founder and Chairman, added: “We are really happy to have agRIF and IFU onboard. To us they are strategic partners who come with not only capital, but also a real understanding of the Huimin model and a plan to help Huimin adopt international microfinance best practices.”

 

Watch here the video about the work and mission of Huimin:

About Incofin IM

Incofin IM is an emerging markets focused independent impact investment manager focused on financial inclusion, the agri-food value chain and safe water. Driven by a desire to promote inclusive progress, Incofin strives to provide the support entrepreneurs’ need in order to improve to lives of the less privileged people. Incofin IM is an AIFM licensed fund manager, advising and managing more than EUR 1 billion of assets. Incofin has a team of more than 60 professionals spread over the headquarters in Belgium and 4 regional offices in Colombia, India, Kenya and Cambodia.

 

About agRIF

agRIF is a third generation (closed-end) fund that uses private equity structures to support investment for financial inclusion in the rural sector. agRIF specifically targets the agricultural sector and smallholder farmers as well as rural micro-entrepreneurs. In addition to the equity investments targeted by the fund, agRIF provides debt capital to agricultural SMEs and agriculture-focused financial intermediaries.