Microfinance Focus, Oct 26, 2010: United Kingdom’s development finance institution, CDC has announced an investment of US$10m investment in Lok Capital II, a commercial microfinance fund in India.
 
CDC is an anchor investor in the fund and has helped Lok Capital II attract a total of US$52m at the first close of its fundraising. Lok Capital II aims to raise a total of US$80m for onward investment in a range of new and established Indian microfinance institutions (MFIs) and businesses.
 
Lok Capital II will make long-term equity investments in microfinance companies in India such as smaller banks, non-bank financial institutions and commercially oriented non-governmental organisations (NGOs) that serve micro and small business customers.  As well as financial backing, Lok Capital II will provide the MFIs with advice to help them cut risks and expand the products and services they provide to their customers.
 
Lok Capital II, which is sponsored by the Lok Foundation, a New York-based not for profit organisation, has also received investment from the International Finance Corporation (IFC) and European development finance bodies.
 
Lok’s first fund, Lok Fund I was one of the first MFI-focused private equity fund in India to attract foreign investment. Lok Capital II is advised by Lok Advisory Services Private Ltd, a Delhi-based investment team.