A member of the World Bank Group, the IFC is partnering with Chicago-based Victory Park Capital (VPC) to launch a new fund to invest in fintech companies in the developing world.
The partnership aims to improve access to debt capital for financial technology companies that lend to small businesses and consumers in emerging markets.
Brendan Carroll, co-founder and senior partner at VPC, said the fund would look at opportunities in Africa, Asia and South America and also India and China, although both those countries already have active fintech investors.
“We will work with the IFC in looking for fintech companies that are looking to provide more flexible credit to consumers or small businesses,” Carroll said. He expects to find opportunities in Brazil and Argentina where there is massive market opportunity and a lot of transactions take place on mobile devices.
“In many ways their mobile environment is more sophisticated than in the United States.”
The first investment was in Africa with plans to expand to India. Near the end of March the IFC and several VC firms announced a $70 million Series B investment in Branch International, a mobile branchless bank with operations in Africa With more than one million unique borrowers, Branch is already the top finance app in Africa. Today it offers credit in loans ranging from $2.50 to $500, and it plans to diversify into savings and payments in the future. It will use some of the investment to expand into India.
The Series B, which combines debt and equity was led by Trinity Ventures and its general partner, Schwark Satyavolu will join the Branch board of directors. Other Series B participants include Victory Park, International Finance Corporation (IFC), Andreessen Horowitz and CreditEase Fintech Investment Fund. The Series B brings Branch’s total investment to $80 million in the three years since its founding.
Microofinance has been slow to adopt mobile, said Branch co-founder and CEO Matt Flannery, who previously co-founded and served as CEO of the non-profit lending platform Kiva.