Belgian impact fund focused on the Indian rural economy hits first close of USD 60 M

A group of international investors announce the successful first closing of the Incofin India Progress Fund (IPF) with USD 60 million of commitments. The fund will make private equity investments in the Indian agri food value chain and in financial inclusion for rural entrepreneurs in India. The committed capital comes from a diverse set of private and institutional investors including Korys, CDC, Proparco, the Belgian Investment Company for Developing Countries (BIO), the SDG Frontier Fund, the King Baudouin Foundation and several Belgian family offices.

India as an impact investment destination holds great promise. It is a country with an aspirational, young population (86% of the population is younger than 55 years) focused on enriching their lives through hard work and entrepreneurship. At the same time, the country faces serious challenges like inequality (gender, education, family wealth) and a lack of technology, organised supply chains, and access to capital. Although 65% of India’s population lives in rural areas, private equity investments have largely focused on urban companies. As a result, many budding entrepreneurs fail to realise their full potential.

The India Progress Fund (‘IPF’) will support these promising entrepreneurs and increase their chances of success through patient capital, mentoring and access to a global network. IPF will focus on two sectors which make the deepest social impact in the Indian context - financial inclusion and the agri-food value chain.

The complexity of the financial inclusion and the agri-food value chain sector have somewhat deterred equity investors. Through its sector-focused approach and international experience in these sectors, IPF intends to bridge this gap and contribute to a vibrant private equity ecosystem.

Incofin IM also benefits from a decade long strong Indian footprint with successful growth capital investments through its local teams in Chennai and New Delhi. Korys, the family office of the Colruyt family, a leading food retailer in Europe, is an expert in the operational food value chain with over 50 years of retail industry experience. Korys has significant downstream experience in the agri-food sector and will provide additional support for networking with European retailers and consumer markets.

Besides Korys, the first closing of the India Progress Fund also brought together other investors with high impact mandates, including CDC, Proparco, BIO, the SDG Frontier Fund and King Baudouin Foundation amongst others. IPF hit USD 60 million in commitments at this first closing, and the intention is to achieve total capital commitments of USD 80-100 million in subsequent closings.

“Over the last 13 years of being present in India, Incofin has first-hand practical rural market experience. 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.” - Aditya Bhandari, Partner Incofin IM.

Loïc De Cannière, founder and chair Incofin IM: “We are convinced that strategic partnerships between large corporates with a genuine focus on sustainability and impact fund managers backed by investors with an impact mandate are the way forward to achieve tangible impact on the ground.”

Hari Subramanian, Partner India of Korys: “Korys sees a good match in the objective of the India Progress Fund with our principles of sustainability. For a vast population in India that still has no access to basic financial services, this fund can make a meaningful difference in the lives of the farmers and rural entrepreneurs and bring a substantial improvement of the agri food value chain. I am positive that with the broad exposure of Korys and the in-depth experience of Incofin, this collaboration will make a significant impact in the small and medium enterprises.”

“Eradicating hunger and malnutrition,” according to Luuk Zonneveld, CEO of BIO, “is one of the great challenges of our time. So, in order to feed a growing world population and to contribute to food security, especially of the poor, BIO is a dedicated investor in agriculture, agro-industry, and agroforestry. BIO supports a whole range of entrepreneurs along the complete agriculture value chain, from producers to consumers. This has the extra benefit of creating jobs and kick-starting the economy. That is why BIO gladly participated in this newly created India Progress Fund.”