By Lynda Kiernan-Stone, Global AgInvesting Media
Launched in 2018 with a funding goal of $80 million, the India Progress Fund was the first country-specific fund for Incofin, which historically had earmarked allocation of between 15 and 20 percent from its prior funds for investment in the country.
Incofin noted that as an impact investment destination, India holds significant promise. Eighty-six percent of the country’s population is below 55 years of age. And despite facing serious challenges such as inequality in regard to gender, education, and family wealth, a lack of technology, organized supply chains, and access to capital, the population is highly aspirational, and is focused on bettering their lives through entrepreneurship.
However, 65 percent of India’s population live in rural areas, while private equity investments have widely been allocated to urban destinations, resulting in many talented people not being able to realize their full potential.
But, the country’s vast and growing population, combined with increasing affluence and socio-economic shifts, are expected to see the country’s overall food consumption increase by 4 percent per year to 2030, while per capita food consumption is expected to increase by 3 percent per year. Consumption in rural areas is expected to climb by 2.5 percent, while food consumption in urban areas will see double this growth at five percent.
Based on these projections, and the expected growth in the country’s agricultural production, processing, and exporting activities, McKinsey foresees India’s agricultural industry growing at a rate of between 5.2 and 5.7 percent over the next two decades.
This fund was created to drive private equity capital investment in the Indian agri food value chain and in financial inclusion for rural entrepreneurs in the country. Backing this mission is a diverse set of private and institutional investors including Korys, CDC, Proparco, the Belgian Investment Company for Developing Countries (BIO), the SDG Frontier Fund, the King Baudouin Foundation, and several Belgian family offices.
Luuk Zonneveld, CEO of BIO, said, “Eradicating hunger and malnutrition is one of the great challenges of our time. So, in order to feed a growing world population and to contribute to food security, especially of the poor, BIO is a dedicated investor in agriculture, agro-industry, and agroforestry. BIO supports a whole range of entrepreneurs along the complete agriculture value chain, from producers to consumers. This has the extra benefit of creating jobs and kick-starting the economy. That is why BIO gladly participated in this newly created India Progress Fund.”
With its investors’ backing, the Incofin India Progress Fund will increase promising entrepreneurs’ success in two sectors – financial inclusion and the agri-food value chain – through patient capital, mentoring, and access to a global network.
“Over the last 13 years of being present in India, Incofin has first-hand practical rural market experience,” said Aditya Bhandari, partner, Incofin IM. “Success from microfinance shall be carried forward to the large unmet missing middle. IPF shall back entrepreneurs aiming to challenge the status quo, in the process to transform from informal to formal market setup.”
It’s true that the complexity of these two sectors in India has a history of deterring equity investors. But by leveraging its sector-focused approach and international experience in these areas, the India Progress Fund aims to bridge this gap and contribute to a dynamic private equity ecosystem.
“The modernization of the agri value chain in India is an underinvested opportunity with significant potential for rural impact and for creating meaningful enterprises,” said Rahul Rai, partner, Incofin IM. “We are grateful to our investors for enabling us to execute this investment strategy.”
Incofin also brings a strong, decade-long footprint in India with successful growth capital investments and local teams in Chennai and New Delhi. Additionally, Korys, the family office of the Colruyt family, a leading European food retailer bringing expertise in the operational food value chain with more than 50 years of retail and downstream agri-food experience, will provide additional support for networking with European retailers and consumer markets.
“Korys sees a good match in the objective of the India Progress Fund with our principles of sustainability,” said Hari Subramanian, partner, India – Korys. “For a vast population in India that still has no access to basic financial services, this fund can make a meaningful difference in the lives of the farmers and rural entrepreneurs and bring a substantial improvement of the agri food value chain. I am positive that with broad exposure of Korys and in-depth experience of Incofin, this collaboration will make a significant impact in the small and medium enterprises.”
– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@