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November 11 2016

LeapFrog in partial exit from IFMR Capital to Fidelity’s Eight Roads

  • LeapFrog Investments has sold part of its stake in IFMR Capital to Eight Roads Ventures, the proprietary investment arm of Fidelity International
  • The successful partial exit is part of a wider deal which sees an injection of USD 25m capital in IFMR Capital
  • This is a major boost for financial inclusion in India and demonstrates the attractiveness of this market.

London, November 11th 2016

LeapFrog Investments, the specialist private equity investor in emerging markets, has confirmed its successful partial exit from IFMR Capital, a leader in providing capital market access to financial institutions that serve low-income consumers. The exit is part of a wider deal in which Eight Roads Ventures, the proprietary investment arm of Fidelity International Limited will be investing up to $25M in the company.

LeapFrog will continue as the largest independent shareholder, actively adding value to IFMR Capital’s business. LeapFrog’s profit-with-purpose partnership with IFMR Capital so far has seen the business increase its reach across India to over 29 million underserved people, a 240% increase since LeapFrog entered the business. Today IFMR Capital works with over 100 institutions that serve individual borrowers in affordable housing, small business, vehicle and agriculture finance. The company has so far facilitated capital of around $4.5bn.

Michael Fernandes, Partner at LeapFrog Investments and co-leader of LeapFrog’s Asian investments, said, “We are delighted to be part of IFMR Capital’s rapid growth story. This inspiring story of both profit and purpose proves that meeting the need for financial inclusion in India is a compelling investment proposition. We look forward to continuing our close partnership with this exceptional management team as they reach increasing millions of underserved people across the country.”

According to the World Bank, just 6 per cent of Indian adults over the age of 15 have borrowed from a financial institution, while only 9 per cent have accessed credit for a farm or business. IFMR Capital has delivered attractive returns to investors through enabling these emerging consumers to realise ambitions and aspirations through credit and finance.

This transaction represents LeapFrog’s first realization from its USD 400m second fund, which takes private equity stakes in innovative firms in Asia and Africa, and has a specialist focus on companies that provide essential financial services to low-income consumers.

Kshama Fernandes, Managing Director and CEO of IFMR Capital said, “IFMR Capital works to create a stable and inclusive financial inclusion ecosystem in India. LeapFrog Investments has provided IFMR Capital with exceptional financial and strategic expertise, which has enabled the business to accelerate its growth and substantially increase its impact across India. This deal is a further demonstration of the vast market opportunity of delivering universal access to finance across India.”

“LeapFrog Investments has provided IFMR Capital with exceptional financial and strategic expertise, which has enabled the business to accelerate its growth and substantially increase its impact across India.”

Kshama Fernandes, Managing Director and CEO, IFMR Capital