Dealflow | April 20, 2015

Bamboo Finance Raises $31 Million for “Next Generation” Microfinance

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Bamboo Finance is doubling down on microfinance. Backed by a decade of experience and an appetite from mainstream investors, the private equity firm specializing in business models that benefit low-income communities announced a first close of $31 million for its Bamboo Financial Inclusion Fund II.

The close attracted institutional investors including Teachers Insurance and Annuity Association of America (TIAA-CREF) and AXA-IM. “Our investment helps provide for a commercially viable and sustainable means of delivering financial products, such as credit and savings vehicles, to low-income and underserved populations in emerging markets around the world,” said Rekha Unnithan, Director of Impact Investing within TIAA’s Responsible Investment team.

Bamboo Finance operates a $195 million portfolio of 31 companies and has a track record of profitable exits, including 2013’s sale of TenGer Financial Group, the holding company of Mongolia’s XacBank.

The firm is eager to move beyond criticism of the effectiveness of microcredit, pointing to evolving best practices, standards, and social performance reporting driven by social performance management initiatives including the Principles for Investors in Inclusive Finance.

“Microfinance has developed a lot over the last decade and is ready for the next generation of growth,” said Jean-Philippe de Schrevel, Bamboo’s CEO. Microfinance as a sector accounted for about a fifth of the invested impact investment assets of respondents to the Global Impact Investing Network’s 2014 survey.