The UK’s CDC Group and Incofin IM have reached the successful first close of the US$60 million Incofin India Progress Fund (IPF) that will make private-equity investments in the agri-food value chain and financial services for rural entrepreneurs in India.

The committed capital comes from a diverse set of private and institutional investors, including CDC, Proparco, Korys, BIO and several Belgian family offices and foundations.

India as an impact investment destination holds great promise as it has an aspirational, young population (86% of it is younger than 55 years old) focused on enriching their lives through hard work and entrepreneurship. At the same time, the country faces serious challenges like inequality, and a lack of technology, organised supply chains and capital. Although 65% of India’s population lives in rural areas, private-equity investments have largely focused on urban companies.

As a result, many budding entrepreneurs fail to realise their full potential. The IPF will support these promising entrepreneurs through patient capital, mentoring and access to a global network with a focus on two sectors that will have the deepest social impact – financial inclusion and the agri-food value chain.

“The modernisation of the agri-food value chain is an underinvested opportunity in India with significant potential for rural impact and for creating meaningful enterprises,” says Rahul Rai, an Incofin IM partner.

The complexity and multidimensional characteristic of the financial inclusion and the agri-food value chain sector have somewhat deterred equity investors. Through a sector-focused approach and international experience in the sectors, IPF intends to bridge the gap and contribute to a vibrant private-equity ecosystem.