Bamboo Finance reaches $31m first close on financial inclusion fund

The fund will invest in banks and financial services companies targeting micro-enterprises, small- and medium-sized enterprises (SMEs), and the low to lower middle incomes segments where there still is significant exclusion from financial services. The geographical remit of the fund will include Asia, Africa, Latin America, and the Middle East.

"Our investment strategy for Financial Inclusion Fund II will leverage our experience, networks, and proprietary pipeline to deliver attractive financial returns to our investors while enabling the low-income segments and MSMEs to access high quality and affordable financial services," said Xavier Pierluca, CIO at Bamboo Finance, in a statement.

He added that over the past decade microfinance insitutions have provided an increasingly diversified market of attractive investment opportunities with high quality loan portfolios, low levels of leverage, efficient operations and increasing interest from a variety of buyers including regional and international banks. He also noted how improved regulation and governence has accompanied this growth.

"These factors along with mobile technology adoption and new channels such as correspondent banking inspired the creation of the Bamboo Financial Inclusion Fund II," said Bamboo Finanace CEO Jean-Philippe de Schrevel. "Microfinance has developed a lot over the last decade and is ready for the next generation of growth"

Aside from the latest vehicle, Bamboo has three funds under management: the $53 million Oasis Fund, set up in 2007; the Solar For All Fund; and the $195 million Financial Inclusion Fund I. Across its funds the firm claims to have backed 31 companies across 22 countries and deployed about $195 million.

Bamboo's previous investments in Asia include: India's Modern Family Doctor, which runs affordable primary care clinics in India; Bridge, a Philippines-based financial services start-up dedicated to improving rural banking; and a controlling interest in specialist private equity fund Accion Investments in Microfinance.

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