British International Investment

VIVRITI FIXED INCOME FUND – SERIES 3 IFSC LLP

South AsiaFinancial services

A GIFT City domiciled fund investing in asset-backed securitisations in India.

Our investment

Description of the investment.

We invested in Vivriti India Retail Asset Fund (VIRAF) to increase financing for low-income individuals and micro, small and medium-sized enterprises (MSMEs). VIRAF will primarily invest in scuritised pools of loans from smaller non-banking finance companies (NBFCs) in India, increasing their access to affordable funding and increasing their ability to on-lend.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Sustain and increase economic opportunities by providing access to financial services to individuals and MSMEs (SDG 8.3, 8.10).

How?

Primary Secondary
  • Catalysing markets: Our commitment to this fund seeks to demonstrate the commercial viability of on-lending to segments that are too risky for commercial investors to fund on a stand-alone basis. This will further help the development of this asset class in India.
  • Direct: Our loan will support on-lending to microfinance institutions, two-wheeler financing companies, and financiers for education. The loans will enable borrowers to save, invest, smoothen consumption and manage risk.
  • Economic enabler: Our loan will support on-lending for MSMEs to better manage cashflows and grow their businesses.

Who?

Stakeholder Geography Characteristics
Customers

India (with a focus on serving rural and semi-urban regions that largely do not have an active banking sector).

32 per cent of capital deployed to date (15 underlying NBFCs) is to NBFCs which primarily reach low-income borrowers and 90 per cent reach to women.
Firm owners

India (with a focus on serving rural and semi urban regions that largely do not have an active banking sector)

Targeted MSMEs (85 per cent reach to female-led MSMEs) often unable to access financing from banks on terms and at rates that are suitable for their needs.

How much?

Scale Depth/Duration
  • Catalysing markets: Potential for large scale, market-level impact if this kind of structure is replicated and results in increased access to debt capital for lending institutions serving underserved market segments.
  • Direct: The portfolio is currently enabling on-lending to 100,000 microfinance institution customers and 55,000 MSME customers. At target fund size, we expect the fund to enable on-lending to a minimum of 375,000 borrowers.
  • Depth of impact expected to be greatest where loans are used for productive purposes, where access to credit is provided for the first time and/or where there are few alternatives.
  • Duration of impact to be long-term where access to credit effectively helps smoothen financial shocks at the household and business level.

Contribution/additionality

Contribution/additionality
  • Financial additionality: Capital is not offered in sufficient quantity or on the same terms: The fund is unlikely to reach optimum size without our commitment. Our capital is also additional at the market level, given capital for NBFCs is not available in sufficient quantity or on suitable terms.
  • Value additionality: We will support the fund to address gaps in their environmental and social and business integrity systems.

Risk

External Risk

Given the targeted sectors, broader macroeconomic risks could negatively impact the fund returns and reduce the likelihood of the structure being replicated by others in the market.

Execution Risk

Risk linked to broader customer protection and other risks given the focus on low-income borrowers.

Understanding our impact information (PDF)

Environmental and social information

  • Environmental and social summary

    A high-level description of the environmental and social aspects of the investment. This may include a summary of key environmental and social risks identified during environmental and social due diligence (ESDD); key elements of an environmental and social action plan (ESAP); or ways in which we plan to support the investee improve environmental and social standards, such as through their environmental and social management system (ESMS); as well as any other priority areas agreed with the investee.
  • Environmental and social risk

    A risk category rating, which indicates the level of environmental and social risk associated with an investment. For an explanation of the categorisations used, see here. We consistently provide an environmental and social risk category for all investments screened from 2023 onwards.

Environmental and social summary

The investment is classified as medium-high E&S risks given the consumer protection risks in the MFI sector. We are working with the investee closely on integrating consumer protection risks within their ESMS and they have made progress in updating their MFI ESG risk rating system and engaging an external consultant with consumer protection expertise to facilitate this process.

Environmental and social risk

Medium-High

Understanding our approach to environmental and social risk (PDF)

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to reportsandcomplaints@bii.co.uk or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at enquiries@bii.co.uk

  • Key facts
    First published

    When the investment was first published on the website database.

    :
    March 2025
    Last updated

    When the last quarterly update of the website database occurred.

    :
    March 2025
    Project number

    An identifier number shared by investments in the same project.

    :
    D7932
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia
    Country

    The countries where the investment delivers impact. Where impact is delivered in multiple countries, this is indicated.

    :
    India
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Financial services
    Sub sector

    The sub-sector that the investment is made into; this provides a more granular level of detail than the ‘sector’ information

    :
    Specialized Finance

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Debt
    Start date :
    December 2024
    Amount :
    $30m
    Currency of investment :
    USD
    Domicile

    The company or investment fund’s place of incorporation.

    :
    India

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