FMO, the Netherlands’ development finance company, plans to make an investment of $42 million (about Rs 290 crore at current exchange rate) in social-impact investor and asset manager Aavishkaar Venture Management Services Pvt. Ltd.
In a disclosure, FMO said the proposed funding will be used by Aavishkaar to grow its loan book as well as pursue new growth initiatives.
The development institution will also play an active role in improving environmental, social and corporate governance principles in Aavishkaar, it added.
The investment in Aavishkaar will be FMO’s second reported investment in an Indian company within a month. In June, it announced plans to make a debt investment of $30 million (Rs 209 crore) in Kolkata-based Srei Equipment Finance Ltd (SEFL), a wholly owned unit of Srei Infrastructure Finance Ltd.
The Dutch investor finances projects through equity and debt investments in sectors such as agri-business, food and water, energy and financial institutions in under-served regions.
It is an active investor in the country. In June, it also invested in Mumbai-based Nomisma Mobile Solutions Pvt. Ltd, which owns digital payments and loans platform Ftcash.
In March, VCCircle reported that FMO had invested $5 million (around Rs 34.5 crore) in Husk Power Systems Pvt. Ltd, which supplies off-grid power to rural areas.
Aavishkaar backs companies that focus on India's rural areas and bottom-of-the-pyramid segment. Founded in 2002, the firm helps entrepreneurs via equity funding, venture debt, microfinance, investment banking intermediation, consulting, research and access to global networks.
In June, the impact investment firm made a partial exit from Utkarsh Coreinvest Ltd., one of its portfolio firms in the financial services sector. Aavishkaar had first invested in Utkarsh Coreinvest through its Aavishkaar Goodwell India Microfinance Development Company II Ltd in 2009.
Other companies on its portfolio include Intellecash, Mera Doctor, and Zameen Organics.