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Anirudh Sarda
Head of Equity Investments, Oikocredit |
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Anirudh works as Head of Equity Investments (Asia) at Oikocredit, an
impact investor having over € 1 billion in total assets in Asia, Africa and Latin America.
He manages the Asian equity investment portfolio and leads the regional equity team to
promote Oikocredit’s mission of empowering low-income people to improve their
livelihoods.
He joined Oikocredit in 2017 and led several equity investments in microfinance,
affordable housing finance, agri finance and fintech sectors. He specializes in business
strategy, capital raising and risk management.
Before Oikocredit, he worked at corporate organizations where he gained experience in
venture capital, and investment banking in renewable energy, power and infrastructure
sectors. He accumulates 15 years of work experience and is a CFA Charterholder and
an MBA in Finance from IMT, Ghaziabad.
About Oikocredit
Oikocredit Ecumenical Development Cooperative Society U.A. is a cooperative society headquartered in Amersfoort, Netherlands. Founded and incorporated on November 4, 1975, Oikocredit aims is to improve lives of low-income people through building enduring impact and resilience within communities by undertaking initiatives that are scalable and replicable.
Oikocredit finances more than 500 partners globally, with total assets of € 1,141.9 million (at 30 September 2023). For more information, visit www.oikocredit.coop.
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1 Being a prominent impact investor, we're keen to gain insights into your current portfolio in India. Could you provide an overview of the major sectors or segments across which your Indian investments are distributed?
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With nearly five decades of experience in promoting sustainable development, our equity investment strategy focusses on the sectors of financial inclusion, agriculture and renewable energy to improve the quality of life of low-income communities.
Oikocredit’s strategy includes investing in both proven and innovative businesses which have the potential to deliver high impact. Proven businesses align with our core value of contributing to a more equitable society. Innovative businesses provide us the opportunity to play a catalytic role in the formative years. We typically invest between EUR 1 to 10 million with an investment horizon of 7 – 10 years.
Being a balance sheet investor, Oikocredit has invested in a mix of early and growth stage businesses. In India, our partners operate in several sectors including Microfinance, Fintech, Affordable housing finance, MSME finance and Agri finance.
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2 How does Oikocredit support and add value to its portfolio companies beyond capital investment?
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Equity investments allow Oikocredit to have influence and ability to drive positive impact by way of a value creation plan. The plan includes best practices on governance, risk management, employee ownership program, social performance improvement etc.
We appoint an internal/external board nominee who is typically a seasoned industry veteran hence bringing high quality board expertise to facilitate our partner’s business.
Through our shareholder relationship, we facilitate connections with our global network of co-investors and lenders to aid capital raise. We bring in our 48 years of global investing experience to improve risk management practices and support international expansion. For early-stage companies, our engagement with the founders is continuous and proactive aiding in strategic decision making. We also offer training on social performance measurement and improvement.
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3 Can you give us some examples of successful investments made by Oikocredit in India, and what made these companies stand out?
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We invested in ESAF and Fusion microfinance, which we exited in 2019 and 2022 respectively. Both these partners scaled their AUM 20x+ during our investment period. Our partner Annapurna microfinance’s AUM scaled 25x since our first investment while focussing on the most underserved regions of India. Our partner Sewa Grih Rin offers affordable housing loans to low income segments with a special focus on women home ownership. Its AUM has scaled 10x. Our partners also include innovative fintech companies Avanti Finance which offers livelihood loans to rural regions of India and its AUM has scaled 15x since our first investment, and Kaleidofin which offers an innovative suit of financial services to low income segments.
The success of these companies can be attributed to the founders' genuine desire to create a positive impact and focus on the needs of the underserved segments. Working with aligned shareholders has brought in clear focus. Oikocredit has also supported its partners by providing follow-on capital multiple times.
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4 How does Oikocredit measure and track the impact of its portfolio companies beyond financial returns?
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Before closing an investment, we agree on 2-3 social impact targets with our partner which are then monitored on quarterly basis. Oikocredit also conducts annual ESG assessment of all its partners. Unique aspect of our ESG scorecard is the >70% weightage to social factors. We also conduct yearly field visits which involve direct interaction with customers, allowing us to gain firsthand insights into the impact generated by our investments.
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5 What are your views on the impact investing market in India? How does it compare with other emerging markets where you invest in? Could you share Oikocredit’s investment strategy in India for the calendar year 2024?
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Oikocredit focusses on 33 emerging markets and India is an important market for us.
What sets India apart is the large market size which presents opportunities for impact investors to address social challenges at scale. India is a growing hub for technology and innovation, with a thriving startup ecosystem. There are high quality entrepreneurs combining business principles with a commitment to addressing social issues, providing opportunities for investors to support initiatives with a dual focus on profit and impact. Moreover, India’s strong and professional regulatory environment provides high confidence to foreign investors like us.
2024 will be an active year for us in terms of new investments and we expect to close several new deals. We want to actively focus on early stage companies utilizing innovative, technology-enabled business models that lower delivery costs for essential products and services, thereby accelerating or improving access for target beneficiaries.
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