New Delhi, India, April 3, 2012
—IFC, a member of the World Bank Group, will invest up to $20 million in the Pragati India Fund, a pioneering investment vehicle that will focus on small and medium enterprises in low-income Indian states.
The investment will help Pragati provide growth capital to start-ups outside of major urban centers, creating jobs and promoting inclusive economic growth. The fund, the first of its kind in India’s low income states will operate in the states of Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal, areas where attracting private investment has traditionally been a challenge.
“Pragati will provide equity capital for expansion, environmental and social governance, and operational guidance to small and medium enterprises,” said Narayanan Shadagopan
,
Managing Director of Pragati Equity Advisors who manage this fund. “Based on its rich and long experience of investing globally in many key sectors, IFC is a valued co-investor that will help increase the impact of the project.”
In India, small and medium enterprises typically receive only five percent of all private equity capital, forcing them to rely on high-cost informal borrowing. The Pragati fund is designed to fill that funding gap and support the development of the country’s financial infrastructure.
“Small and medium enterprises operating in India's low-income states are constrained by limited funds,” said Rashad Kaldany, IFC Vice President for Global Industries. “IFC's investment in the Pragati Fund will help enterprises in these states to access finance, thereby creating employment opportunities for the underserved.”
The project is also being supported by the Commonwealth Development Corporation, part of the UK government’s Department for International Development, which has provided $50 million to the Pragati fund.
About IFC
IFC, a member of the World Bank Group is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities - all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
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