Scots arm of social investment fund in £9.5m Indian deal

The Edinburgh office of a global social investment fund launched with the backing of former US president Bill Clinton has brokered a $15 million (£9.5m) deal aimed at providing micro-insurance products to millions of Indians.

LeapFrog Investments’ $135m “high impact” fund has financial backing from a number of banks including JP Morgan, ethical Dutch lender Triodos and the Soros Economic Development Fund set up by veteran investor George Soros. It aims to generate “robust investment returns” while providing cover for tens of millions of “vulnerable people” in Asia and Africa.

Yesterday’s deal will see LeapFrog invest $15m in India’s Shriram Capital, forming a partnership to provide insurance, as well as savings and investment products, to an estimated ten million Indians.

Jim Roth, who operates out of LeapFrog’s Edinburgh operation and is a co-founder of the fund, said: “Our partnership with Shriram will have enormous social impact by financing and improving cover for millions of financially excluded clients and their families in India while also generating healthy financial returns.”

Roth worked on the deal alongside Edinburgh-based colleague and director Stewart Langdon.

It is estimated that more than one billion low-income people in India are seeking, and are able to pay for, insurance but the market penetration is less than 9 per cent.

Micro-insurance offers low premiums and small coverage limits and is aimed at consumers and businesses not served by regular commercial insurance schemes.

G S Sundararajan, managing director of Shriram Capital, said: “This is much more than just another investment in the group. We believe that this partnership will redefine financial inclusion in India.”