Chennai, India, January 24, 2009—
IFC, a member of the World Bank Group, has joined forces with VenturEast and Bharatiya Yuva Shakti Trust to set up a fund that will provide financing and mentoring to Indian entrepreneurs with growth potential but limited resources.
The BYST Growth Fund will target India’s disadvantaged young entrepreneurs, who are considered high risk and their businesses require equity financing rather than debt financing.
"Many young entrepreneurs do not have access to affordable financing, despite having sound business proposals," said Lakshmi V. Venkatesan, BYST's Executive Vice President and Founding Trustee. "The new fund will help address this issue as well as develop a model that can be replicated across India, which has a large segment of the world’s unemployed youth."
IFC played a key role in structuring the fund to help facilitate growth of existing BYST entrepreneurs and to create new enterprises. IFC also helped identify the independent private equity fund manager VenturEast and provided $700,000 of initial support. VenturEast has mobilized an additional $2 million from other institutions, including the Small Industries and Development Bank of India. The fund aims to mobilize $5 million.
"This is India's first micro-equity initiative to finance socially disadvantaged entrepreneurs," said Sarath Naru, Managing Partner of VenturEast. "The key to managing the fund successfully lies in balancing the concerns of multiple investors and partners while ensuring important social impacts at the grassroots level."
Anil Sinha, General Manager of IFC Advisory Services, said, "This initiative aligns well with IFC's strategy to help create opportunities and support inclusive development in India. The BYST Growth Fund will provide young entrepreneurs with equity financing in addition to guidance from BYST mentors."
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $16.2 billion in fiscal 2008, a 34 percent increase over the previous year. For more information, visit
www.ifc.org
.
