Over the past few decades, India has mobilized 300+ million people out of multidimensional poverty and made significant progress in social upliftment. However, the nation continues to reel with gaping inequalities, which have been further compounded by the Covid-19 pandemic, across sectors. To make matters worse, India’s $565 Bn Sustainable Development Goals (SDGs) annual financing gap has only further widened post the pandemic. At the same time, government social funding is still constrained by limited resources, while economic shocks have induced a demand failure.
Given these challenges, it is imperative to look beyond traditional models of socio-economic development and embrace innovative financing mechanisms such as blended finance to enhance overall effectiveness of development interventions.
Blended finance is the strategic use of development finance from public and philanthropic sources to mobilise additional capital from the private sector towards sustainable development. Typically, grant funding is blended with other sources of capital such as debt or equity to maximize funding and social impact capacity.
As the definition above suggests, blended finance enhances the impact of philanthropic and government funding by leveraging the funds to unlock the trillions of dollars of commercial capital available in the global market to finance socio-economic development. This innovative financial structuring is used to re-balance the risk–return profiles of pioneering, high-impact investments that would otherwise be deemed too risky to fund. The catalytic nature of such transactions allows governments and foundations to address market failures by utilising their corpus of funds judiciously.
Use of development finance and philanthropic funds to attract private capital
Investments must be targeted towards concrete social or environmental impact
Financial return for a set of investors, based on risks and pricing of impact
Blended Finance structures can be categorised into four thematic archetypes based on the mode of intervention.
Concessional capital encompasses the universe of catalytic funding from development organizations with the intention of bearing below-market returns and/or absorbing higher investment risk. This re-balancing of the risk-return profile through the use of catalytic capital helps make investments in the social sector more worthwhile for risk averse commercial investors.
Support Mechanism structures come in diverse forms such as technical assistance facilities, design stage grants, project preparation facilities etc. They aim to strengthen the quality, efficiency and sustainability of development projects and improve the financial viability of Blended Finance transactions by increasing the probability of financial close.
Risk mitigation tools function as a form of insurance for commercial investments into social impact. Unlike concessional capital that is often deployed hand-in-hand with commercial capital, risk mitigation guarantees a portion of future losses on an investment. In effect, such tools help augment market efficiency because capital is only used to cover losses when they actually occur.
Results-based Financing is an innovative, outcomes-oriented or pay-for-success approach that incentivizes providers, and the investors providing their working capital, based on achievement of agreed- upon, measurable performance targets. Such structures are unique because capital is not deployed to satisfy the cost of inputs but to reward the achievement of desired outcomes by end beneficiaries. Common forms include Social/ Development Impact Bonds, conditional cash transfers, debt swaps and outcome- linked interest rate loans.
By facilitating robust public-private collaboration, Blended Finance structures present a strong and unique opportunity for investors, foundations and governments to collaborate in a way that build upon each other’s strength while mitigating risks.
Blended Finance can strengthen the government’s efforts to support underserved and marginalised sections of society. The use of innovative financing structures can increase both depth and breadth of government programs to drive large scale impact by:
Commercial investors have traditionally been wary of investing in the development sector due to unfavourable risk-return tradeoffs. However, the use of Blended Finance structures can support investors looking for market returns through:
Blended Finance structures can catalyse the flow of capital into the social sector and support the development agenda of non-profits and foundations by:
Blended Finance allows development financiers to tackle structural needs for programs at different stages of the life cycle and market maturity. By providing an improved risk-return profile for the private sector, Blended Finance can help to bridge funding gaps that impede development objectives in situations a market failure needs to be overcome.
Brings more investable,
market ready projects
Makes capital available
in unpenetrated markets
Brings in new
investors and skills
Leads to fully
commercial solutions
Stay update-to-date about all the news pertaining to blended finance and contribute to shaping the future of blended finance in India.
Year & Duration:
2015 (5 years)
Sector:
Livelihoods
Instrument:
Guarantees and Insurance
In India, Citi had a USD 10 Mn loan facility, partially guaranteed by Overseas Private Investment Corporation, with Ujjivan Financial Services, a microfinance institution (MFI) that provides microloans to India’s female urban microentrepreneurs. This facility enables women entrepreneurs to avail loans to grow their businesses, hire employees, and promote economic progress for themselves, their families, and communities.
Capital Commitment:
USD 10 Mn loan facility with partial guarantee
Sources of Capital:
Citibank, Ujjivan Financial Services, Overseas Private Investment Corporation
Stakeholders:
–
Vehicle Type:
Facility
Year & Duration:
2022 (5 years)
Sector:
Climate action
Instrument:
Guarantees and insurance
The Climate Smart Fund for onward lending by an NBFC was partially guaranteed by an International Foundation. This enabled the NBFC to extend loans to enterprises including agri-SMEs, agritech businesses, clean technology companies working with renewable energy, climate adaption, climate mitigation, climate resilience technologies in agriculture supply chain which include support the following: (i) renewable energy in agriculture, (ii) regenerative agriculture, or (iii) circular use in agriculture.
The names of the NBFC and Foundation have been kept confidential on request.
Capital Commitment:
USD 3.6 Mn catalyzed by a partial guarantee
Sources of Capital:
Confidential
Stakeholders:
Confidential
Vehicle Type:
Facility
Year & Duration:
2022 (5 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
The NBFC received a credit guarantee by an International Foundation for lending to women entrepreneurs, women farmers or women-led enterprises in upstream agri-value chains such as Farmer Producer Organizations / Community Based Organizations, agri-SMEs and agritech businesses.
Additionally, lending to the above entities that are in upstream agri value chains working with renewable energy/climate adaption/mitigation/resilience technologies which provide following: (i) renewable energy in agriculture, (ii) regenerative agriculture, or (iii) circular use in agriculture. (DRE, RE, afforestation, organic cultivation, circular use of commodity)
The guarantee is to enable the NBFC to create a portfolio of INR 900 Mn on a revolving basis for 5 years.
The names of the NBFC and Foundation have been kept confidential on request.
Capital Commitment:
USD 11.25 Mn catalyzed by a partial guarantee
Sources of Capital:
Confidential
Stakeholders:
Confidential
Vehicle Type:
Company
Year & Duration:
2020 (4 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
The loan guarantee facility was used to unlock credit for early stage enterprises engaged in impact sectors. Philanthropic capital of upto USD 85K was used as as a first loss tranche.
Capital Commitment:
USD 0.26 Mn mobilized with a first loss tranche of USD 0.085 Mn
Sources of Capital:
Caspian Impact Investments Pvt Ltd, The Lemelson Foundation
Stakeholders:
IQ EQ Corporate Services (Mauritius (this is backed by IIEF -Impact Innovators and Entrepreneurs Foundation)
Vehicle Type:
Facility
Year & Duration:
2022 (3 years)
Sector:
Financial Services
Instrument:
Subordinate Debt
The PTC structure allowed the Consumer Finance Company to reach underserved and new to credit customers and offer credit at better rates compared to informal money lenders. It also helped beneficiaries cover emergency needs. Northern Arc took a subordinate role to offer increased protection to the investor.
Capital Commitment:
~USD 33 Mn catalyzed with first loss tranche
Sources of Capital:
Northern Arc
Stakeholders:
Consumer Finance Company, Commercial Bank
Vehicle Type:
Bonds / Notes
Year & Duration:
2022 (1 year)
Sector:
Financial Services
Instrument:
Subordinate Debt
The PTC structure allowed the Consumer Finance Company to reach underserved and new to credit customers and offer credit at better rates compared to informal money lenders. It also helped beneficiaries cover emergency needs. Northern Arc took a subordinate role to offer increased protection to the investor.
Capital Commitment:
~USD 28 Mn catalyzed with first loss tranche
Sources of Capital:
Northern Arc
Stakeholders:
Consumer Finance Company, Commercial Bank
Vehicle Type:
Bonds / Notes
Year & Duration:
2023 (4 years)
Sector:
Livelihoods
Instrument:
Guarantees and insurance
The US$50 million IIX Women’s Livelihood Bond 5 is the first sustainable debt security in the market issued in compliance with the Orange Bond Principles and is expected to empower ~300,000 women and girls across Asia and Africa. The proceeds of the WLB5 will be used to make loans to high-impact enterprises in Cambodia, India, Indonesia, Kenya, and the Philippines that operate across six sectors: microfinance, SME lending, clean energy, sustainable agriculture, water and sanitation, and affordable housing.
Capital Commitment:
India portfolio of USD 22 Mn
Sources of Capital:
IIX
Stakeholders:
Northen Arc
Vehicle Type:
Bonds / Notes
Year & Duration:
2013 (5 years)
Sector:
Livelihoods
Instrument:
Concessional Equity, TA
FCDO and SIDBI anchored one of the first social venture funds ‘Samridhi Fund’ to provide risk capital to scalable enterprises that benefit the poor in the low-income states through job creation, increased earnings and reduced cost of goods and services. Alongside, FCDO also provided TA support to the Fund – to strengthen social impact monitoring and measurement, improve ESG standards of investees, overall capacity building etc.
More details at: https://devtracker.fcdo.gov.uk/projects/GB-1-114293/summary
Capital Commitment:
Mobilised USD 65 Mn using concessional equity and TA
Sources of Capital:
FCDO, SIDBI
Stakeholders:
SIDBI Venure Capital
Vehicle Type:
Fund
Year & Duration:
2018 (11 years)
Sector:
Energy
Instrument:
Concessional Equity, TA
The GGEF, anchored by India’s National Investment and Infrastructure Fund (NIIF) and the UK Foreign, Commonwealth and Development Office (FCDO), and managed by EverSource (Mumbai), is a fund-of-funds structure that has raised US$741 million from a mix of institutional investors and DFIs, supported by concessional funds in the form of subordinated equity from the GCF (via Dutch development bank FMO). GGEF is one of the largest single-country funds focused on Climate change, Mitigation and Adaptation in the emerging markets. GGEF plans to invest equity capital through sectoral platforms in climate technology growth firms in renewable energy, e-mobility, energy services and resource efficiency projects with strong innovation potential.
Capital Commitment:
Mobilised USD 741 Mn using concessional equity and TA
Sources of Capital:
FCDO, NIIF, Green Climate Fund
Stakeholders:
BP (British Petroleum), Allianaz, BII, FMO, Microsoft, Triodos, Royal Bank of Carribean
Vehicle Type:
Fund
Year & Duration:
2021 (1 year)
Sector:
Financial Services
Instrument:
Guarantees and insurance
CIIE.CO is the Innovation Continuum built at IIM Ahmedabad spreads across incubation, acceleration, seed and growth funding, and research. CIIE.CO has partnered with 360 ONE Foundation to address the issue of lack of accessible and quality credit for the Bharat Segment, which comprises Indian households living on less than $10 a day. With the support from 360 ONE Foundation, CIIE.CO was able to provide three inclusive lending start-ups with catalytic funding support of INR 40,00,000 to be utilized as a First Loss Default Guarantee (FLDG) capital, and one start-up with a funding support of INR 45,00,000 for validation grant. The catalytic funding support enabled the start-ups to unlock significant additional capital (>10X leverage) from formal credit sources to validate their business case and extend the benefits of financial inclusion and access to credit to the Bharat Segment. Under the project, CIIE.CO also provided technical assistance and business progression support to the selected start-ups over a period of 8 months.
From a CSR compliance perspective, CIIE.CO has Section 12A Income Tax Exemption, 80G and a CSR Certificate. Contribution to CIIE.CO is in line with Schedule VII item list ix (a) of Companies Act. To ensure compliance with the CSR mandate, CIIE.CO paid out the grant to start ups and provided utilisation evidence. Further, the impact of financial assistance on end beneficiaries is monitored and reported at regular intervals.
Capital Commitment:
Mobilised ~ USD 1.7Mn as loans using ~USD 0.25Mn as grant as first loss tranche
Sources of Capital:
360 ONE Foundation, NBFCs
Stakeholders:
CIIE.CO, 360 ONE Foundation
Vehicle Type:
Project
Year & Duration:
2022 (3 years)
Sector:
Health, Livelihood
Instrument:
Guarantees and insurance, SSN
The objective of the transaction is to generate livelihoods for beneficiaries from vulnerable communities, through skilling. IIT Delhi (SAMRIDH Hosting entity) through its research and development deployed a new and innovative financing solution to enable skilling and placement through implementing entity in partnership with the National Skill Development Corporation (NSDC) and 360 ONE Foundation thereby exponentially impacting 3 to 4x beneficiaries in comparison to training using vanilla grant. This financing solution enables the implementing entity to offer short-term training and placement to beneficiaries, either through fee-based or government-sponsored model schemes.
The project is divided into two phases:
Phase 1 (Training): The project leverages 360 ONE Foundation’s grant of INR 1.335 Cr to unlock additional working capital loan of INR 4.00 Cr from NSDC at an affordable rate of 6% p.a. through partial risk guarantee to train and place 2420 beneficiaries (3 to 4x beneficiaries in comparison to training using vanilla grant) and provide employment opportunities and livelihood linkages to them. The guarantee is renewable for two years. If the risk guarantee is not invoked or is partially invoked, it will be utilized to further enable working capital loan, thereby training additional beneficiaries. In case the guarantee is not invoked within the first two years, the balance amount will be utilized in the form of a vanilla grant in the third year to directly fund training of more beneficiaries.
Phase 2 (Placement & Retention): On achievement of an additional milestone ie beneficiaries are retained in the job after 3 months post placement, a component of 360 ONE Foundation’s grant amounting to INR 26.70 lakhs will be used in the form of Social Success Note linked to placement and retention of beneficiaries thus leading to further reduction in cost of borrowing for the implementing entity and incentivizing the risk investor (NSDC) for better performance outcomes.
This initiative is compliant with CSR regulations under clause (ix) (b) of Schedule VII of the Companies Act, 2013 – contribution to public funded universities like IITs to engage in conducting research aimed at promoting Sustainable Development Goals (SDGs). To ensure compliance with the CSR mandate, IIT Delhi pays out the grant to NSDC and provides utilisation evidence. Further, the end outcome of training and placement of marginalised marginalised beneficiaries is monitored and reported at regular intervals. Also the grant is tracked for a period of 2 years so that any balance is utilised as further support to end beneficiaries.
Capital Commitment:
Mobilized additional USD 0.5 mn using ~30% partial risk guarantee; USD 0.04Mn as interest-linked incentives
Sources of Capital:
360 ONE Foundation, NSDC
Stakeholders:
IPE Global, IIT Delhi, Implementing Entity undertaking training, 360 ONE Foundation
Vehicle Type:
Facility
Year & Duration:
2022 (1 year)
Sector:
Financial Services
Instrument:
Cocessional Debt, Guarantees and Insurance
The Labour Dignity Bond was set up to provide low cost working capital loans to micro-contractors in the urban construction space as an incentive to adopt and mantain ethical practices.
The transaction involved a lending partner NBFC – Gromor Finance, entity through which the working capital loans were extended. KOIS India led the financing structuring of the project. Gromor issued NCDs to KOIS Holdings and the received $265k in return to lend to micro-contractors.
The loan portfolio by backed by an FLDG of 35% each, by MSDF and Acumen Foundation. The facility was set up as a working capital line (avg. ticket size of 3-5 lacs), for 90 days at the rate of interest of 18% annually which is much lower compared to 23-24% interest rates that the borrowers avail otherwise via informal channels.
Under working capital facility, underwriting was conducted for ~120 micro-contractors, out of which 22 MCs passed the process and had an option to avail the loan. Additional incentives provided to micro-contractors include work orders, entrepreneurship training and ethically sourced workers.
Capital Commitment:
USD 0.27Mn with a guarantee of upto 70%
Sources of Capital:
KOIS, Acumen, MSDF
Stakeholders:
NORAD, GFEMS – TA grant provider; Sattva Consulting, Haqdarshak, Gromor Finance
Vehicle Type:
Facility
Year & Duration:
2022 (1 year)
Sector:
Health
Instrument:
SSN / Interest Subvention
To strengthen India’s healthcare system, Axis Bank Samridh Blended Finance Facility has introduced a Portfolio level- Performance linked payment structure (Incentives worth ~2.50% p.a. interest on loans upon achievement of target milestones) to enable access to commercial capital for small and medium-scale enterprises within the healthcare sector. This pay-for-success blended finance instrument will help for-profit enterprises by enabling access to affordable capital for scaling their operations and creating social impact. In this model, the commercial capital provider offers concessionary capital to the small, or medium-sized enterprise that has a proven business model, and the outcome funder provides incentives in the form of interest subvention to the qualifying healthcare enterprises when they achieve the pre-defined target impact milestones, thereby improving their risk-return profiles. making capital more affordable. The impact outcomes shortlisted for the healthcare enterprise are quantifiable and easily measurable for the model to succeed and scale up.
Capital Commitment:
USD 157 Mn with up to 2.5% p.a. interest subvention; 2.48mn philanthropic capital from USAID (SAMRIDH)
Sources of Capital:
Axis Bank, USAID (SAMRIDH)
Stakeholders:
IPE Global
Vehicle Type:
Facility
Year & Duration:
2020 (2 years)
Sector:
Livelihoods
Instrument:
Guarantees and insurance
This is a grant to support financing of micro-entrepreneurs in the construction sector, with FLDG covering ~20% of loan amount.
Capital Commitment:
Total fundraise of USD 1 Mn +
Sources of Capital:
Dell Foundation, other funders
Stakeholders:
Sattva, Sambhav Foundation
Vehicle Type:
Company
Year & Duration:
2020 (3 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
This is a guarantee support for on- lending to micro and small enterprises. The guarantee enables NBFCs to raise capital to create a liquidity fund focused on providing loans to micro entrepreneurs impacted by the COVID-19 pandemic in India.
Capital Commitment:
Total fund of USD 5.6 Mn
Sources of Capital:
International foundation, private investors
Stakeholders:
–
Vehicle Type:
Fund
Year & Duration:
2020 (NA)
Sector:
Financial services
Instrument:
Subordinate debt
An Indian fintech company raised a Series C round using concessional capital from a DFI, which helped catalyze private sector participation.
Capital Commitment:
Total fundraise of USD 11 Mn
Sources of Capital:
DFI, private equity fund
Stakeholders:
–
Vehicle Type:
Company
Year & Duration:
2011 (NA)
Sector:
WASH
Instrument:
Concessional capital
The project provides safe drinking water that is purified at the point of sale through a low-cost chlorination technique and using a local distribution system based on existing water kiosks. The project focuses on providing clean water to rural villages in Eastern India.
Capital Commitment:
Total capital of USD 0.7 Mn
Sources of Capital:
Confidential
Stakeholders:
–
Vehicle Type:
Company
Year & Duration:
2014 (NA)
Sector:
Energy
Instrument:
Concessional capital
SolarArise is an Indian SPV facility that invests in grid-connected solar PV assets and projects in India, engaging in both acquisitions of existing power stations and developing Greenfield solar fields.Investment strategy of SolarArise prioritizes low-risk assets that can provide annuity-like payments to its investors and offer short- term investment cycles. SolarArise received concessional capital from GEEREF.
Capital Commitment:
Total fundraise of USD 100 Mn; USD 13 Mn from GEEREF
Sources of Capital:
GEEREF (Global Energy Efficiency and Renewable Energy Fund), Thomas Lloyd Group, Core Infrastructure India Fund
Stakeholders:
–
Vehicle Type:
Company
Year & Duration:
2021 (7 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
Samunnati received a credit guarantee from the USDFC to create a portfolio of USD 25 Mn (nearly INR 200 Cr) with a 50% pari-passu credit guarantee from the DFC. It is focused on FPOs where a majority of the underlying members are women and agtech companies providing key technology solutions to small and marginal Farmers (SMFs), clean energy solutions companies, and companies engaged in food loss management solutions for SMFs.
Capital Commitment:
USD 25 Mn fund, with 50% guarantee
Sources of Capital:
USDFC
Stakeholders:
Samunnati Finance
Vehicle Type:
Fund
Year & Duration:
2022 (3 years)
Sector:
Financial services
Instrument:
Subordinate debt
This is a 3-year blended finance vehicle structured as an AIF. The fund utilizes a layered capital structure with 75% senior tranche, 17.5% mezzanine tranche, and 7.5% subordinate tranche. This structure allows investors with different risk-return preferences to co-exist in the same fund. The senior tranche is being anchored by an Indian Development Finance Institution (DFI) with a mandate to develop India’s MSME sector. Fund invests NCDs issued by NBFCs and other lenders that extend last-mile finance to MSMEs, micro-entrepreneurs, and low-income households, to help the borrowing entities develop a capital market footprint.
Capital Commitment:
USD 40 Mn fund
Stakeholders:
Vivriti Asset Management Pvt Ltd
Vehicle Type:
Fund
Year & Duration:
2019 (3 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
Rabo Foundation partnered up with a mid-size NBFCs to provide a portfolio guarantee for lending to agtech companies.
Capital Commitment:
USD 2 Mn with partial guarantee
Sources of Capital:
NBFC
Stakeholders:
Agtech startups
Vehicle Type:
Facility
Year & Duration:
2019 (2 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
Impact NBFC received a credit guarantee from Rabo Foundation for strengthening its ability to provide loans to FPOs, cooperatives, Self-Help Groups (SHGs), and other community-based organizations with appropriate credit products, and facilitate access to finance to such organizations. The guarantee enabled impact NBFC to create a portfolio of INR 240 Mn.
Capital Commitment:
USD 3.2 Mn with partial guarantee
Sources of Capital:
Impact NBFC
Stakeholders:
Early stage FPOs
Vehicle Type:
Facility
Year & Duration:
2020 (3 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
Rabo Foundation partnered up with a small NBFC to provide a portfolio guarantee for lending to agtech companies.
Capital Commitment:
USD 2 Mn with partial guarantee
Sources of Capital:
NBFC
Stakeholders:
Agtech startups
Vehicle Type:
Facility
Year & Duration:
2018 (4 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
Rabo Foundation provided a partial guarantee to 4 leading banks for financing FPOs for post-harvest requirements.
Capital Commitment:
USD 2.7 Mn with partial guarantee
Sources of Capital:
Private Banks
Stakeholders:
FPOs
Vehicle Type:
Facility
Year & Duration:
2020 (3 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
Rabo Foundation provided a partial portfolio guarantee with Nabkisan to FPOs, federations, agri SMEs, agtech companies, etc.
Capital Commitment:
USD 3.7 Mn with partial guarantee
Sources of Capital:
Nabkisan
Stakeholders:
Secondary FPOs, federations, agri SMEs, agtech companies, mature FPOs
Vehicle Type:
Facility
Year & Duration:
2020 (3 years)
Sector:
Health
Instrument:
Guarantees and insurance
The guarantee from USAID covers 50% pari-passu risk on principal only on the qualifying loans extended by the bank to the healthcare entities by paying a utilization fee to the USAID every year on the outstanding loan book. There is significant need for medium- to long-term financing for healthcare en risk-sharing guarantee of losses after collection efforts pursuant to the claim. In case of recovery, the bank shall reimburse USAID on a pro-rata basis the recovered funds after deducting any expenses incurred in the collection efforts.terprises in India. The guarantee is a pro-rata risk-sharing guarantee of losses after collection efforts pursuant to the claim. In case of recovery, the bank shall reimburse USAID on a pro-rata basis the recovered funds after deducting any expenses incurred in the collection efforts.
Capital Commitment:
USD 50 Mn facility with 50% pari-passu partial guarantee
Sources of Capital:
IndusInd Bank, USAID
Vehicle Type:
Facility
Year & Duration:
2013 (2 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
Rabo provided 100% guarantee cover, to one of the largest FPOs in India to enable their access to credit.
Capital Commitment:
USD 0.07 Mn with full guarantee
Sources of Capital:
NBFCs
Stakeholders:
FPOs
Vehicle Type:
Facility
Year & Duration:
2020 (3 years)
Sector:
Health
Instrument:
Returnable grant, guarantee and insurance, interest subvention
Blackfrog Technologies is a health- tech company specializing in the last- mil biologicals. Its groundbreaking invention, EMVÓLIO, a portable, active cooling, battery-powered device, facilitates safe last-mile delivery of COVID-19 vaccines across the country. Through the blended finance structure, Blackfrog was able to avail a loan from Caspian Debt, a leadinge delivery of medical supplies and NBFC. However, given the risk profile of the enterprise additional collateral was required to avail the loan as well as initial support to service the loan at market rates until entity achieves commercial sustainability. Blackfrog was also provided with scale-up advisory support through the TA facility of USAID to enable access to international markets such as Africa.
Capital Commitment:
Total investment of USD 0.2 Mn
Sources of Capital:
Caspian Debt USAID, Rockefeller Foundation
Stakeholders:
IPE Global
Vehicle Type:
Facility
Year & Duration:
2021 (2 years)
Sector:
Health
Instrument:
SSN / Interest subvention
Multiple social enterprises with proven business models are covered under an umbrella of low-cost loans under this program. Caspian Debt provided loans to healthcare enterprises in the pool using which the enterprise will work to achieve pre-agreed social impact outcomes. Based on the achievement of these outcomes, they will receive an outcome payment (from SAMRIDH) via Caspian Debt equivalent to 5% p.a. of the interest payment, thereby reducing the overall interest cost for the enterprises. Each of the social enterprises which form part of the portfolio have to achieve quantifiable and measurable impact indicators basis which the quantum of outcome payments is linked.
Capital Commitment:
USD 5 Mn facility, with up to 5% p.a. interest subvention
Sources of Capital:
Caspian Debt, USAID (SAMRIDH)
Stakeholders:
IPE Global
Vehicle Type:
Facility
Year & Duration:
2020 (3 years)
Sector:
Health
Instrument:
TA grant / Grant
Supported by USAID and implemented by IPE Global, SAMRIDH unlocks affordable capital through blended finance structures to scale high-impact and commercially sustainable solutions targeted to improve healthcare for vulnerable communities. It is structured as a multi-sectoral partnership, with the Government of India, development agencies, private sector, including entrepreneurs, accelerators, and financial institutions, and academia. SAMRIDH has mobilized a capital pool of USD 350+ million to offer both grant and debt financing provided to healthcare enterprises, with a target to achieve leverage of 8–10x on its investments. Through this approach over 60+ high-impact solutions have been funded reaching over 30 Million population.
Capital Commitment:
Mobilized USD 350 Mn using ~USD 25-30 Mn concessional capital
Sources of Capital:
USAID
Stakeholders:
IPE Global
Vehicle Type:
Facility
Year & Duration:
2005 (17 years)
Sector:
WASH
Instrument:
TA grant / Grant
Under this program, Water.org provides grants, TA, and educational resources to MFIs for them to scale up sanitation loans to households. The objective is to expand access to clear drinking water and sanitation infrastructure in India. WaterCredit helps bring small loans to those who need access to affordable financing and expert resources to make household water and toilet solutions a reality.
Capital Commitment:
USD 855 Mn mobilized
Sources of Capital:
IDFC First, IndusInd Bank, Unity SFB, Satin, Muthoot, Cashpor, Annapurna
Stakeholders:
TA/ Grant providers: PepsiCo Foundation, Caterpillar Foundation, SwissRe Foundation, Microsoft AWS, Cummins Bank of America, Ikea Foundation, Target, USAID
Vehicle Type:
Facility
Year & Duration:
2020 (7 years)
Sector:
Financial services
Instrument:
Subordinate Debt
This is a 6-year blended finance vehicle structured as an alternate investment fund (AIF). The fund utilizes a layered capital structure with subordinate catalytic risk funding (~20% of the committed capital) from impact foundations, high net-worth individuals (HNIs) and the Vivriti Group being used to crowd in senior commercialinvestors for financial inclusion. Fund invests INR 0.15–0.25 billion per transaction in capital market instruments like NCDs issued by NBFCs and other lenders that extend last-mile finance to micro-entrepreneurs and low-income households. The tenure of instruments ranges from 2-6 years. This helps the NBFCs to develop a capital market footprint in addition to directing capital to areas where is it most needed. The fund is India’s first AIF to have a senior tranche rated AA+ (SO) for capital protection by CRISIL. The fund has received USD 3 Mn in commitments from the Dell Foundation.
Capital Commitment:
USD 35 Mn fund
Sources of Capital:
Dell Foundation, banks, insurance companies, HNIs, Vivriti Group
Stakeholders:
MFIs, SMEs, Vivriti Asset Management Pvt Ltd.
Vehicle Type:
Fund
Year & Duration:
2017 (5 years)
Sector:
Energy
Instrument:
TA grant / Grant
USICEF is India’s first project preparation facility to scale up distributed solar power projects and develop them into viable investment opportunities and drive long- term debt financing. Grant-funded TA helped prepare high-quality investment- grade project proposals to increase prospects of obtaining long-term debt financing. So far, the grantees have been able to mobilize cumulative USD 300 Mn of commercial capital in long-term financing.
Capital Commitment:
USD 20 Mn facility
Sources of Capital:
CDC, Grantham Foundation, Government of India
Stakeholders:
Climate Policy Initiative
Vehicle Type:
Facility
Year & Duration:
2015 (8 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
USAID and USDFC partnered with impact NBFCs to unlock credit for enterprises operating in the education, financial inclusion, food and agriculture, healthcare, water, sanitation and hygiene, renewable energy and energy efficiency sectors. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 10 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2015 (8 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
USAID and USDFC partnered with impact NBFCs to unlock credit for enterprises operating in the education, financial inclusion, food and agriculture, healthcare, water, sanitation and hygiene, renewable energy and energy efficiency sectors. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 35 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2021 (2 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
USAID and USDFC partnered with a private bank to unlock credit for SMEs, with a focus on those that are women-owned or with women loan signatories, and where women are the primary decision-makers. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 100 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
Private Bank
Vehicle Type:
Facility
Year & Duration:
2021 (2 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
USAID and USDFC partnered with a private bank to unlock credit for mid-market (non-AAA rated) NBFCs for on-lending to MSMEs with gender inclusive practices and policies and to MSMEs operating in sectors impacted by COVID-19. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 50 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
Private Bank
Vehicle Type:
Facility
Year & Duration:
2018 (NA)
Sector:
Health
Instrument:
Guarantees and insurance
USAID and USDFC partnered with an NBFC to provide credit to Healthspring, a network of primary healthcare clinics, to assist in expansion of network. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 5 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Company
Year & Duration:
2018 (NA)
Sector:
Health
Instrument:
Guarantees and insurance
USAID and USDFC partnered with an NBFC to provide credit to Healthspring, a network of primary healthcare clinics, to assist in expansion of network. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 5 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Company
Year & Duration:
2019 (9 years)
Sector:
Energy
Instrument:
Guarantees and insurance
USAID and USDFC partnered with an impact NBFC to unlock credit for SMEs operating in the renewable energy/energy efficiency sector, including SMEs in the manufacturing and non-manufacturing sectors that want to install a rooftop solar system. USAID- USDFC provided partial pari-passu portfolio guarantee
Capital Commitment:
USD 20 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2021 (7 years)
Sector:
Energy
Instrument:
Guarantees and insurance
USAID and USDFC partnered with two impact NBFCs to unlock credit for SMEs borrowing to invest in a rooftop solar system. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 43 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2019 (9 years)
Sector:
Climate action
Instrument:
Guarantees and insurance
USAID and USDFC partnered with an impact NBFC to unlock credit for businesses operating in the forestry sector, including MSEs operating along sustainable forestry value chains, and/or to MFIs on-lending to such entities. Rabo Foundation participates as a first-loss guarantor. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 3 Mn with partial guarantee
Sources of Capital:
USAID, USDFC
Rabo Foundation
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2019 (9 years)
Sector:
Climate action
Instrument:
Guarantees and insurance
USAID and USDFC partnered with an impact NBFC to unlock credit for businesses operating in the forestry sector, including MSEs operating along sustainable forestry value chains, and/or to MFIs on-lending to such entities. Rabo Foundation participates as a first-loss guarantor. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 12 Mn with partial guarantee
Sources of Capital:
USAID, USDFC, Rabo Foundation
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2021 (9 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
USAID and USDFC partnered with impact NBFCs to unlock credit for Farmer Producer Organizations (FPOs), ag-tech providers, and clean energy and food loss management solutions providers, exclusively for the development of solutions benefiting smallholder farmers. USAID- USDFC provided partial portfolio guarantee. Rabo Foundation will provide technical assistance funding to facilitate capacity building efforts for the borrowers.
Capital Commitment:
USD 3 Mn with partial guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2021 (9 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
USAID and USDFC partnered with impact NBFCs to unlock credit for Farmer Producer Organizations (FPOs), ag-tech providers, and clean energy and food loss management solutions providers, exclusively for the development of solutions benefiting smallholder farmers. USAID- USDFC provided partial portfolio guarantee. Rabo Foundation will provide technical assistance funding to facilitate capacity building efforts for the borrowers.
Capital Commitment:
USD 15 Mn with partial guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2021 (9 years)
Sector:
Agriculture
Instrument:
Guarantees and insurance
USAID and USDFC partnered with impact NBFCs to unlock credit for Farmer Producer Organizations (FPOs), ag-tech providers, and clean energy and food loss management solutions providers, exclusively for the development of solutions benefiting smallholder farmers. USAID-USDFC provided partial portfolio guarantee. Rabo Foundation will provide technical assistance funding to facilitate capacity building efforts for the borrowers.
Capital Commitment:
USD 37 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2019 (9 years)
Sector:
Energy
Instrument:
Guarantees and insurance
USAID and USDFC partnered with a private bank to unlock credit for energy efficiency and renewable energy companies operating in the off-grid and distributed renewable energy sectors, including end users of all technologies.USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 75 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
Private Bank
Vehicle Type:
Facility
Year & Duration:
2019 (9 years)
Sector:
WASH
Instrument:
Guarantees and insurance
USAID and USDFC partnered with an impact NBFC to unlock credit for enterprises operating in water provision, water purification, toilet manufacturing, Fecal Sludge Management (FSM), etc. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 1 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
Svakarma
Vehicle Type:
Facility
Year & Duration:
2019 (9 years)
Sector:
WASH
Instrument:
Guarantees and insurance
USAID and USDFC partnered with an impact NBFC to unlock credit for enterprises operating in water provision, water purification, toilet manufacturing, Fecal Sludge Management (FSM), etc. USAID-USDFC provided partial pari-passu portfolio guarantee
Capital Commitment:
USD 10 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
NBFC
Vehicle Type:
Facility
Year & Duration:
2019 (9 years)
Sector:
WASH
Instrument:
Guarantees and insurance
USAID and USDFC partnered with a private bank to unlock credit for enterprises operating in water provision, water purification, toilet manufacturing, Fecal Sludge Management (FSM), etc. USAID-USDFC provided partial pari-passu portfolio guarantee.
Capital Commitment:
USD 71 Mn with 50% pari-passu guarantee
Sources of Capital:
USAID, USDFC
Stakeholders:
Private Bank
Vehicle Type:
Facility
Year & Duration:
2005 (15 years)
Sector:
WASH
Instrument:
Guarantees and insurance
KWSPF operates as a special purpose entity. The company was formed for the purpose of issuing debt securities to repay existing credit facilities, refinance indebtedness, and for acquisition purposes. KWSPF, issued a 15-year pooled bond to raise capital from domestic capital markets for small and medium ULBs. The fund specifically raised capital for a water supply and sewerage infrastructure development project in 8 ULBs within the Bangalore metropolitan area in Karnataka, India. USAID partial credit guarantee for 50% of the principal was an important feature of the transaction.
Capital Commitment:
Pooled issuance of ~USD 15 Mn; 50% partial guarantee; AA rated
Sources of Capital:
Government of India, private investors
Vehicle Type:
Project
Year & Duration:
2002 (15 years)
Sector:
WASH
Instrument:
Guarantees and insurance
WSPF – Tamil Nadu is a pooled bond to facilitate access to long-term domestic capital markets for small and medium urban local bodies (ULBs) to finance water and sanitation services. This enabled grouping of 13 ULBs to overcome high transaction costs and mobilize funds through a single bond issuance. Debt was repaid from project cash flows and general ULB revenues. A multi-layered credit enhancement package was designed in order to extend the maturity of the bond and increase investor confidence. The different credit enhancement mechanisms included a debt service reserve fund capitalized by the state government, creation of individual ULB escrow accounts, a local debt service reserve fund, a state revenue intercept mechanism, and a partial credit guarantee from USAID.
Capital Commitment:
Pooled bond issued by 13 municipalities; structured debt of USD 6.2 Mn with 9.2% coupon rate, 15- year maturity; AA rated
Sources of Capital:
Advanta Ltd, Baghat Urban Cooperative Bank Ltd, City Union Bank, Credit Capital Investments, Digital Globalsoft Ltd, Gujarat Industries Power
Vehicle Type:
Fund
Year & Duration:
2021 (4 years)
Sector:
Livelihoods
Instrument:
DIB
Skill Impact Bond is an initiative of National Skill Development Corporation that is the risk investor with Dell Foundation. The bond will support 50,000 young people in India over 4 years, 60% of whom will be women and girls, and provide them with skills and training and access to wage- employment in COVID-19 recovery sectors including retail, apparel, healthcare, and logistics. CIFF, HSBC, JSW Foundation, and Dubai Cares are the outcome funders.
Capital Commitment:
Outcome funding of USD 17.7 Mn, risk capital of USD 4 Mn
Sources of Capital:
Dell Foundation, National Skill Development Corporation, CIFF, HSBC, JSW Foundation, Dubai Cares
Stakeholders:
British Asian Trust (BAT), USAID, Dalberg Advisors, Oxford Policy Management
Vehicle Type:
Project
Year & Duration:
2019 (3 years)
Sector:
Education
Instrument:
DIB
This is a pioneering CSR-backed DIB, (IndusInd Bank and State Bank of India CSR) that fund a large project aimed at improving foundational language learning for 115,000 Class I and II students in 3,300 government schools across 7 districts in Haryana. The implementation partner for this program, the Language and Learning Foundation has expertise in carrying out literacy improvement programs by building the capacity of state officials (teachers, teacher educators, etc.) in partnership with state governments. CSF acted as the risk investor.
Capital Commitment:
Outcome funding of USD 2.2 Mn, risk capital of USD 0.45 Mn
Sources of Capital:
Central Square Foundation (CSF), IndusInd Bank, State Bank of India
Stakeholders:
Language Learning Foundation, HSSPP (Haryana School Shiksha Pariyojna Parishad), Social Finance India Education Outcomes (evaluator)
Vehicle Type:
Project
Year & Duration:
2022 (4 years)
Sector:
Livelihoods
Instrument:
Guarantees and insurance
WLB4Climate is the second investment of IIX’s Women’s Catalyst Fund, a next- generation gender-lens instrument that has partners including US International Development Finance Corporation (DFC), Korean International Cooperation Agency, and Australian Department of Foreign Affairs and Trade. WLB4Climate supports women-focused enterprises in India, Indonesia, Cambodia, and the Philippines, that are directly enabling women to create livelihoods to sustain themselves, their communities, and the planet, creating an ecosystem of climate-friendly small and medium-sized enterprises (SMEs).
Capital Commitment:
India Portfolio of USD 14 Mn with a guarantee
Sources of Capital:
IIX
Stakeholders:
Pahal, Kinara Capital
Vehicle Type:
Bonds/Notes
Year & Duration:
2021 (4 years)
Sector:
Livelihoods
Instrument:
Guarantees and insurance
This is a pooled bond with 6 MFIs. Northern Arc provided 18-30% of guarantee cover to British International Investment (BII, formerly CDC).
Capital Commitment:
USD 43 Mn total portfolio with 18-30% guarantee cover
Sources of Capital:
British International Investment (formerly CDC), Northern Arc
Stakeholders:
MFIs: Annapurna, Arohan, Chaitanya, Asa, Fusion, Aashirvad
Vehicle Type:
Bonds/Notes
Year & Duration:
2018 (2 years)
Sector:
Financial services
Instrument:
Subordinate debt
Northern Arc structured and arranged the first PERSEC in India. PERSECs allowed monthly collections and prepayments in the underlying pool to be used to buy further receivables from the originator subject to a strict eligibility criterion and with provisions for early amortization if default rates reached a threshold level. This structure addressed the needs of FI clients who were looking for long-term financing and investors who were looking for better risk adjusted returns.
Capital Commitment:
~USD 95 Mn over multiple issuances
Sources of Capital:
DCB Bank, HLF, Northern Arc Capital
Stakeholders:
SK Finance, Aye Finance
Vehicle Type:
Bonds/Notes
Year & Duration:
2017 (5 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
With this loan/bond, Northern Arc was the first financial institution in India to launch a partial guarantee product for Indian NBFCs. Under this structure, an entity issues NCDs or raises loans, which are backed by a partial guarantee as well as collateral (typically, in the form of a pool of loan assets), which the investor may access under certain situations.
Capital Commitment:
~USD 45 Mn over multiple issuances with over 20 originators
Sources of Capital:
Multiple financial institutions and banks in India, Northern Arc Capital
Vehicle Type:
Bonds/Notes
Year & Duration:
2014 (8 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
Northern Arc launched India’s first pooled bond issuance program in 2014. Under this, loans or NCDs of multiple originators are housed within a single structure and backed by a common guarantee. The guarantee is typically in respect of an agreed percentage of the principal sums due under the loans or NCDs and may be invoked in case of a default by any client covered by the structure.This enables the originators to benefit from better pricing supported by a higher credit rating as well as widen their lender / investor base.
Capital Commitment:
~USD 450 Mn over multiple issuances with over 80 originators
Sources of Capital:
Multiple financial institutions and banks in India, Northern Arc Capital
Vehicle Type:
Bonds/Notes
Year & Duration:
2010 (11 years)
Sector:
Financial services
Instrument:
Subordinate debt, guarantees, and insurance
Northern Arc has facilitated over 100 transactions under the MOSEC structure for impact MFIs. In this structure, portfolios of multiple originators are pooled together and securitized. All MOSEC transactions feature double- layered downside protection for investors; first-loss tranches (~10%) provided by originators to respective microloans; and second-loss credit enhancement offered by Northern Arc via investment into the junior tranche or a guarantee. The first- loss cash reserve ensures that originators remain efficient and effective in their collection obligations. MOSEC structures have cumulatively mobilized ~USD 700 Mn in financing.
Capital Commitment:
USD 700-750 Mn over multiple issuances, 10 – 15% used as catalytic capital for first-loss tranche
Sources of Capital:
Commercial Banks, Northern Arc Capital
Vehicle Type:
Bonds/Notes
Year & Duration:
2018 (5 years)
Sector:
Energy
Instrument:
Credit Line
The green climate fund provided a USD 100 Mn line of credit via NABARD for development of rooftop solar power in India’s commercial, industrial, and residential sectors. NABARD on-lent to Tata Cleantech (joint venture between Tata and IFC), an NBFC lending to rooftop solar projects. Another USD 100 Mn was put up by Tata Cleantech Capital, and USD 50 Mn by private investors/equity. The transaction had a total leverage of 1.5:1. The program proposed to replace 250 MW of grid power with power generated from solar rooftop projects.
Capital Commitment:
USD 250 Mn credit facility; USD 100 Mn concessional, USD 150 Mn commercial capital
Sources of Capital:
Tata Cleantech (TCCL), private investors, Green Climate Fund (GCF) via NABARD
Stakeholders:
Tata Clean Tech Capital Ltd
Vehicle Type:
Project
Year & Duration:
2020 (2 years)
Sector:
Others
Instrument:
Returnable grant
Blended finance facility and livelihood accelerator. REVIVE, in collaboration with companies, foundations, and social organizations, identifies deserving informal sector workers and micro-entrepreneurs who have been affected by the pandemic, and provides holistic support to aid their recovery, build their resilience, and invest in their long-term growth. REVIVE provides financial assistance in the form of standard, returnable grants. A returnable grant is the first of its kind – it is funding that comes with zero interest for the beneficiary. It is structured such that repayment only begins once the individual starts earning and is financially stable. The money is then used to fund another individual in need, and so on.
Capital Commitment:
USD 20 Mn facility
Sources of Capital:
Avanti Finance, Svakarma, Gromor- DeAsra, Arth Anchor funders: USAID, Dell Foundation, Omidyar Network India, British High Commission, United Nations Development Programme
Philanthropic funders: Godrej, S&P Global, Brihati Foundation, Vinati Organics, Microsoft, LinkedIn, IIFL, Google, Kotak Mahindra Bank, HDFC Capital, HSBC, Arvind, Info Edge
Stakeholders:
Pratham, Dhriiti, Vrutti, Ambuja Cement Foundation, Mann Deshi Foundation, SEWA, Haqdarshak, Atpar, TRRAIN, Tisser, Snapbizz, Mswipe, Learnet, UMC
Managed by: Samhita Social Ventures, Collective Good Initiative
Vehicle Type:
Facility
Year & Duration:
2020 (5 years)
Sector:
Financial services
Instrument:
Guarantees and insurance
The guarantee aims to unlock on-lending credit of at least INR 1,500 Mn (USD 20 Mn) for micro-enterprises, and impact at least 10,000-15,000 micro-entrepreneurs and their employees. Caspian Impact Investments is a non-banking financial company (NBFC) that offers loans to companies focusing on financial inclusion and to social enterprises in the areas of agriculture, education, healthcare, and energy. Up to 20% of loans are covered by the partial risk guarantee provided by the Dell Foundation.
Capital Commitment:
USD 20 Mn credit facility, with partial risk guarantee support
Sources of Capital:
Dell Foundation
Stakeholders:
Caspian Debt
Vehicle Type:
Company
Year & Duration:
2015 (2 years)
Sector:
Education
Instrument:
SSN / Interest subvention
ISFC provides schools, especially those with limited access to credit, with financial resources to improve infrastructure and quality of education offered. The financing mechanism linked learning outcomes to financial incentives for APSs. The foundation provided debt to ISFC, which provided 3-6-year loans to APS at variable interests. After 2 years, an end-line assessment was conducted. If the school meets its pre- determined targets, it can realize interest rate rebates on the loan amount and the reward payment is adjusted in accordance with ISFC’s interest payments to the foundation (i.e., the foundation absorbs the cost of the reward only when there is a demonstrated achievement of learning targets), while the principal gets repaid fully.
Capital Commitment:
Debt of USD 1.57, with possible interest subvention up to 3.5%
Sources of Capital:
Dell Foundation
Stakeholders:
Gray Matters India (evaluator)
Vehicle Type:
Project
Year & Duration:
2018 (3 years)
Sector:
Health
Instrument:
DIB, TA grant/grant
This is the world’s first health DIB, with the UBS Optimus Foundation as the investor, and MSD for Mothers and the United States Agency for International Development (USAID) as the outcome funder. It aims to improve the quality of maternal care in Rajasthan’s private health facilities by supporting up to 440 small healthcare organizations to meet the new government quality standards and adhere to them over the long term. Payments are made when the private facilities are verifiably ready for NABH and Manyata certification.
Capital Commitment:
Outcome funding of USD 8 Mn, risk capital of USD 2.9 Mn
Sources of Capital:
UBS Optimus Foundation, MSD for Mothers, USAID
Stakeholders:
HLFPPT (Hindustan Latex Family Planning Promotion Trust)/ PSI (Population Services International), Palladium, Mathematica Policy Research (independent evaluator), Social Finance UK, Reed Smith, Phoenix Legal
Vehicle Type:
Project
Year & Duration:
2018 (4 years)
Sector:
Education
Instrument:
DIB, TA grant/ grant
The DIB supported Indian education providers improve learning outcomes for primary school children through an innovative results-based funding mechanism. The DIB aims to achieve this goal by funding three high-performing service providers to improve grade- appropriate learning outcomes for more than 300,000 primary school children aged 5-11 years. Pay-for-performance mechanism aims to maximize education outcomes at scale.
Capital Commitment:
Outcome funding of USD 9.2 Mn, risk capital of USD 3 Mn
Sources of Capital:
UBS Optimus Foundation
Stakeholders:
Gyan Shala, Kaivalya Education Foundation, Society for All Round Development, Pratham Infotech Foundation, Dalberg (performance manager), Grey Matters Capital (evaluator), Go Labs, Brooking – (Research)
Vehicle Type:
Project
Year & Duration:
2017 (4 years)
Sector:
Education
Instrument:
SSN/ Interest subvention, TA grant/grant
The Michael & Susan Dell Foundation designed and developed a pay-for- performance instrument with Varthana, to lend to the affordable private school (APS) segment and drive learning outcomes. The objective was to use financial incentives to nudge school owners to prioritize quality learning. The Dell Foundation offered Varthana an NCD with a mix of commercial and concessional capital. Varthana then mobilized smaller loans to 337 schools across 11 cities in India. The foundation further incentivized the schools with a rebate on interest rate linked to improvement in learning outcomes. A TA was also provided to Varthana to build capacity in these schools to understand and assess learning outcomes.
Capital Commitment:
USD 6 Mn commercial debt USD 2 Mn concessional debt, ~USD 1 Mn TA
Sources of Capital:
Michael & Susan Dell Foundation
Stakeholders:
Varthana, Grey Matters Capital (evaluator)
Vehicle Type:
Bonds/Notes
Year & Duration:
2020 (4 years)
Sector:
Livelihoods
Instrument:
Guarantees and insurance
This is the world’s first gender-lens impact investment security listed on a stock exchange. This innovative instrument mobilizes private capital from all over the world for financing financial institutions (FIs) and impact enterprises focused on creating sustainable livelihoods for women. The WLB bond series pool high-impact women-focused enterprises to create a multi-country, multi-sector, and multi-stakeholder portfolio and issue bonds through a special purpose vehicle (SPV) based in Singapore. These bonds are sold via IIX’s investment banking partners to international accredited and institutional investors, and the proceeds are lent to underlying entities. In India, IIX has partnered with Kinara and Centrum. The loan proceeds will be onward lent to finance and support 2,500+ women- owned small businesses.
Capital Commitment:
Portfolio of USD 12.5 Mn, with a guarantee
Sources of Capital:
WLB Asset II B Pvt Ltd
Stakeholders:
Kinara, IIX, Singapore, (portfolio manager), Visage Holdings and Finance Pvt Ltd, and WLB Asset II B Pvt Ltd
Vehicle Type:
Bonds/Notes
Year & Duration:
2012 (10 years)
Sector:
Financial services
Instrument:
Subordinate debt, TA grant/grant
MIFA is the first microfinance initiative of its size to exclusively target Asian MFIs. MIFA targets Tier II and III MFIs to achieve deep outreach in its target markets by creating and enhancing institutional capacity for sustainable microfinance delivery and to strengthen links between domestic and international capital markets. The International Finance Corporation (IFC) and KfW were the initiators and helped catalyze private funding. BMZ (German Federal Ministry of Economic Cooperation and Development) also provides a TA facility.
Capital Commitment:
NAV of USD 130 Mn, with 31% of assets under management in India
Sources of Capital:
BMZ (German Federal Ministry of Economic Cooperation and Development), EU, IFC, KfW
Stakeholders:
BlueOrchard Finance
Vehicle Type:
Fund
Year & Duration:
2014 (3 years)
Sector:
Others
Instrument:
TA grant / Grant, credit line
The IIX ACTS project is a blended funding model that provides customized investment readiness TA support to impact enterprises, prioritizing early growth-stage enterprises whose majority of beneficiaries and stakeholders are women. The eligible enterprises receive TA upon 10% upfront cost payment and repay the remaining loan as they scale. The program focuses on five sectors – agriculture, health, education, energy, and water – across the Asia- Pacific region.
Capital Commitment:
Total facility of USD 19 Mn, with 10% for TA; India share unknown
Sources of Capital:
Bank of America Charitable Foundation, JP Morgan Chase Foundation, The Rockefeller Foundation, USAID
Stakeholders:
13 social enterprises
Vehicle Type:
Facility
Year & Duration:
2018 (7 years)
Sector:
Energy
Instrument:
Guarantees, insurance, and TA grant / grant
Sindicatum Renewable Energy Company issued the first international local currency green bond in South Asia with a maturity of 7 years. The bond issuance proceeds will finance three brownfield renewable energy projects in India. The bond is listed on the London Stock Exchange. GuarantCo provided a full guarantee for the bond issue. This guarantee helped the bond attain A1 rating from Moody’s and AA- from Fitch. A technical assistance (TA) facility was also provided to cover the legal costs associated with the pioneering issuance. The two bonds are due in 2023 and 2025.
Capital Commitment:
2 INR denominated bonds of IN R 951 Mn and INR 1,585 Mn, listed on the London Stock Exchange, with full guarantee
Sources of Capital:
Public markets GuarantCo, Private Infrastructure Development Group (PIDG)
Stakeholders:
–
Vehicle Type:
Bonds / Notes
Year & Duration:
2021 (2 years)
Sector:
Agriculture
Instrument:
SSN / Interest Subvention
The bond was launched to empower smallholder and marginal farmers with the goal of increasing their incomes and helping them adopt sustainable agricultural farming practices.
Capital Commitment:
Bond of USD 1.5 Mn, with possibility of interest subvention
Sources of Capital:
Grameen Impact Investments Pvt Ltd
Stakeholders:
–
Vehicle Type:
Bonds / Notes
Year & Duration:
2020 (2 years)
Sector:
Livelihoods
Instrument:
SSN / Interest Subvention
The bond provides credit facility to a non- profit, which provided livelihood support to women artisans that were unable to earn their daily wages amid the pandemic, to up-skill them with the vision of re- imagining their livelihoods in the aftermath of COVID-19.
Capital Commitment:
Bond of USD 0.07 Mn, with possibility of interest subvention
Sources of Capital:
Grameen Impact Investments Pvt Ltd
Stakeholders:
–
Vehicle Type:
Bonds / Notes
Year & Duration:
2020 (2 years)
Sector:
Agriculture
Instrument:
SSN / Interest subvention
This is India’s first domestically funded SDG bond for small and marginal farmers. Through this, Grameen Impact had provided a credit facility to private sector foundations with the aim of scaling their impactful, scalable, and sustainable community-owned Lead Farmer Platform to address gaps in last-mile delivery of agriculture extension services and significantly contribute toward increasing the income of small and marginal farmers.
Capital Commitment:
Bond of USD 2.6 Mn, with possibility of interest subvention
Sources of Capital:
Grameen Impact Investments India Pvt Ltd
Stakeholders:
–
Vehicle Type:
Bonds / Notes
Year & Duration:
2019 (2 years)
Sector:
Energy
Instrument:
SSN / Interest subvention
Under this pioneering SDG #7 Impact Bond for clean energy, Grameen Impact Investments provided upfront financing to the implementation partner for implementing its Power@‐1 program at the Madras Diabetes Research Centre, Tamil Nadu.
Capital Commitment:
Bond of USD 0.07 Mn, with possibility of interest subvention
Sources of Capital:
Grameen Impact Investments India Pvt Ltd
Stakeholders:
Social enterprises
Vehicle Type:
Bonds / Notes
Year & Duration:
2018 (2 years)
Sector:
Livelihoods
Instrument:
SSN / Interest subvention
Grameen Impact Investments committed INR 40 Mn (as the upfront investor) to ChildFund India (the implementing agency) with an objective of helping 2,000 marginalized tribal women in Maharashtra and Madhya Pradesh to become self- reliant and empowered by training them to become micro-entrepreneurs, with a specific outcome target of an average annual net income of ‐30,000 through this intervention. Grameen Impact had additionally taken on the role of identifying outcome funders for the bond.
Capital Commitment:
Bond of USD 0.53 Mn, with possibility of interest subvention
Sources of Capital:
Grameen Impact Investments India Pvt Ltd
Stakeholders:
ChildFund India
Vehicle Type:
Bonds / Notes
Year & Duration:
2019 (2 years)
Sector:
Livelihoods
Instrument:
SSN / Interest subvention
The bond helped empower marginalized women by training them to become micro‐entrepreneurs and increase their incomes. Grameen Impact Investments structured the bond and committed INR 5 Mn as the upfront investment to the implementing agency (a Jaipur-based foundation) to deliver grass‐root impact within its communities of local women weavers. The intervention has the potential to promote a viable non‐farm livelihood option for socially excluded communities and marginalized women.
Capital Commitment:
Bond of USD 0.07 Mn, with possibility of interest subvention
Sources of Capital:
Grameen Impact Investments India Pvt Ltd
Stakeholders:
Domestic Foundations
Vehicle Type:
Bonds / Notes
Year & Duration:
2019 (2 years)
Sector:
Livelihoods
Instrument:
Social success note (SSN) / Interest subvention, guarantees, and insurance
Launched by Acumen and Grameen Impact Investments India Pvt Ltd, the bond provided INR 100 Mn credit facility to a pool of 5 for-profit skill development social enterprises to enable sustainable livelihoods for youth in rural and urban areas through vocational and skill development programs. The bond aimed to present a successful workable financial structure to private investors, corporates as well as the government to shift the credit facility assessment for such enterprises from being only a risk‐based assessment model to an impact‐based assessment model that can be incentivized.
Capital Commitment:
Bond of USD 1.3 Mn, supported by 100% guarantee
Sources of Capital:
Grameen Impact Investments India Pvt Ltd, Acumen
Stakeholders:
Social enterprises
Vehicle Type:
Bonds / Notes
Year & Duration:
2015 (3 years)
Sector:
Education
Instrument:
Development Impact Bond
This was the world’s first DIB in education. The DIB was implemented by Educate Girls in partnership with UBS Optimus Foundation (investor) and the Children’s Investment Fund Foundation (CIFF; outcome payer). The DIB was launched with the intention to scale Educate Girls’ impact, with a target to enroll and improve the quality of education for 15,000 girls in Rajasthan. The targeted outcomes were surpassed.
Capital Commitment:
Outcome funding of USD 0.42 Mn, risk capital of USD 0.27 Mn
Sources of Capital:
UBS Optimus Foundation, CIFF
Stakeholders:
Educate Girls, Instiglio (performance manager), IDinsight (evaluator)
Vehicle Type:
Project
Results-based Financing is an innovative, outcomes-oriented or pay-for-success approach that incentivizes providers, and the investors providing their working capital, based on achievement of agreed- upon, measurable performance targets. Such structures are unique because capital is not deployed to satisfy the cost of inputs but to reward the achievement of desired outcomes by end beneficiaries. Common forms include Social/Development Impact Bonds, conditional cash transfers, debt swaps and outcome- linked interest rate loans.
