caspian impact investments · caspian impact investments (cii) completed four years as of march...

CaspianImpactInvestmentsSOCIALPERFORMANCEREPORT

FY2017

TableofContents

Foreword............................................................................................................................................................................3

FundProfileandTimeline................................................................................................................................................4

AnnualPerformanceHighlights......................................................................................................................................5

InvestmentObjectives......................................................................................................................................................6

TheProcess........................................................................................................................................................................7

Food&Agriculture............................................................................................................................................................8

SmallBusinessFinance...................................................................................................................................................12

Microfinance....................................................................................................................................................................14

Healthcare........................................................................................................................................................................17

AffordableHousing.........................................................................................................................................................19

CleanEnergy&EnergyEfficiency..................................................................................................................................22

OtherSectors......................................................................................................................................................................24

CorporateSocialResponsibility.....................................................................................................................................25

CaspianisaCertifiedBCorp..........................................................................................................................................26

GlossaryandAcknowledgements.................................................................................................................................27

CaspianImpactInvestments:SocialPerformanceReport2017

Wedidthisgraduallyanddeliberately,buildingnetworksandexpertiseinnewsectors.WithloansrangingfromINR10MntoINR150Mn,theportfoliohasbeencarefullycurated.

Thedirect impactofa lender likeCII is thatwearewillingtomakethe loansthat traditionalfinancial institutionswillnot.Ourcapitalprovidesthemostliftincaseswhereotherinstitutionaldebtisscarce,forlackofscale,collateraland/orprofitability.OurthesisforCIIwas that relativelyearly stageSMEs couldbedeservingofnon-collateralizeddebt,provided theyareassessedappropriatelyandnotforcefitintoastandardizedmodelsuitableonlyformature,asset-heavybusinesses.

Wewerethefirstbusinesslenderto17%ofourinvestees.41%ofourinvesteeswerelossmakingwhenwefirstfundedthem.Only5outofthe125loanswehavemadearebackedbymortgagecollateral.Inallthis,creditqualityhasremainedexcellent;ouractiveportfoliocompanieshave seen rapid revenuegrowthandequity infusionofmore than INR20Bnduring thispast year,with several of themachievingmonthonmonthoperationalprofitabilityfollowingourloan.Ourinstrumentshavebeenvaried–termloans, linesofcredit,receivables finance, subordinateddebt, securitizeddebt and, onoccasion, venture debt – and are customized to the needs and riskprofileofourinvestees.WeendedFY2017with~INR2.21Bn inportfolioand53activeclientrelationships.Today,weareactive infinancial inclusion, food&agriculture,healthcare,cleanenergy&energyefficiency,affordablehousing,education,livelihoods,drinkingwaterandtech4D.

During the year, we expanded the debt team significantly, in order to prepare for future growth as well as to strengthen our riskmonitoring.Foreverydebtinvestment,weneedtobeconvinced,asateam,abouttheimpactoftheenterprise'sbusinessmodel.ThebusinessmustaddressasocialorenvironmentalproblemthatweatCaspianarecommittedtohelpsolve.Thisisthelensthroughwhichwevieweachpotential investment. To further cement our commitment to using business as a force for good, Caspian became a Certified BCorporationinJune2017.ThisReporttraceshighlightsofourjourneythispastyear,theexcitingbusinesseswehaveworkedwithandtheimpactoftheirworkontheground.

Asalways,weappreciateanyfeedbackyoumayhave.

SViswanathaPrasadManagingDirector

Caspian Impact Investments (CII) completed four years as of March 2017. This is the third impactinvestingvehicle-andthefirstdebtinitiative-managedbyCaspian.Ourbalancesheethasgrown6timesinfouryears.AsofMarch2017,wehavedeployed,cumulatively,INR4.77Bn/~USD75Mnin66enterprisesand125loansacrossmultipleimpactsectors.Since 2004, Caspianhasbeen a pioneer equity investor in financial inclusion. Throughour first fund,Bellwether, and our second, India Financial Inclusion Fund, we have invested INR 4.36 billion in 16companiesinmicrofinance,smallbusinessfinanceandaffordablehousing.In2013,wesetupourthirdinvestmentvehicle,CII,asamulti-sector impactdebtprovider.Themovetodebtandtonon-financialsectors was due toa clear market need that we identified and our intent to bring our capital andexpertisetootherequallycriticalsectors.tors.

Foreword

CaspianImpactInvestments:SocialPerformanceReport2017 3

FundProfile

FundName

Vintage

LegalForm

AssetClass

AssetSize(FY2017)

FundTerm

Manager

CaspianImpactInvestments

2013

Non-Bankingfinancecompany,regulatedbytheRBI

Debt

INR2.94Billion/USD45Million

Open;nofixedterm

CaspianImpactInvestmentAdviser

Timeline


20132013

20142014

2015201520162016

20172017

3YearGoal!

CIIlaunchedasamulti-sectordebtvehiclewithsupportfromGrayGhost,Triodos,FMO.Clearmarketneedidentifiedfordebtamongearlystageimpactenterprises.

BeganwithafocusonFinancialinclusionandFood&Agriculture.

EndedYear1withINR443Mninportfolioand13clients.

DebtfromAnchorlender-OverseasPrivateInvestmentCorp(OPIC).

ForgedpartnershipswithRaboandUSAID.

AddedFinancialInclusionEnablersandHealthcaretoourmandate.

CumulativedisbursementsofINR4.77Bn,125loansto66enterprises

Becameafullydiversifiedimpactlender-AddedWater,Education,Livelihoods,Environment,Tech4Dtoourmandate.

AdditionalEquityraisedfromSIDBI'sSamridhiFund.CrossedINR2Bninassetsize.AddedCleanEnergytoourmandate.

Launchedmarketdevelopmentinitiative;partnershipsforgedwithNAARM,ICRISAT

100clientrelationships

INR7Bn+portfolio

LoansDisbursedandOutstanding

1,043

1,555 1,686

1,068

1,801

2,213

Disbursements(INRMn) PortfolioO/S(INRMn)

FY2015 FY2016 FY20170

1,000

2,000

3,000

PortfolioDistribution(INRMn)

726571

434

292

8927 20 53

SmallBusiness Microfinance Food&Agri Housing FIEHealthcare CleanEnergy OtherSectors

0

250

500

750

LoanType(by#ofloans)

59

21

12

Secured Unsecured Securitized Shortterm

FinancialPerformance

122

228

385

68

156

326

54 71 59

Revenue(INRMn) Expense(INRMn) PBT(INRMn)

FY2015 FY2016 FY20170

200

400

600

PerformanceHighlights

Food & Agri, Microfinance, Small BusinessFinance, Healthcare, Housing, Clean Energy &energy Efficiency, Education,Water& Sanitation,Livelihoods,Tech4D

(UP,BH,MP,OD,CH,JK,RJ,WB)

LoanPortfolio

ClientsfocusedinLowincomestates

First/Secondlender

Clientspre-profitatfirst

loan

UnsecuredLoans

39%47%

21%53Activeclients

11

INR4.7Bndisbursedin125loansto66Clientsacross

Sinceinception(April2013)

2.21Bn

PortfolioUpdate(asonMarch31,2017)


By#Clients

Strengtheningessentialmarket

ecosystems

Reducingvulnerabilityand

inequality

Protectingtheenvironment,promoting

sustainability

IDEATE

Improvingaccesstobasicproductsandservices

Reducingdrudgeryandimprovingthequalityof

life

Providingsafetyandsecuritytolowincome

groupsagainstvulnerability

Operatinginunservedandunderservedgeographicregions

Increasingtheefficiencyofcriticalvaluechains

Improvingfarmproductivity,increasingincomesof

producersandsmallholders

Improvingconnectivity,communicationandother

infrastructure

Creatingopportunitiesfordecentworkandenhancing

livelihoods

Buildingresilienceandadaptabilitytoclimate

change

Providingsubstitutestoharmfulproductsand

technologies

Conservingnaturalresourcesandpromotingtheirsustainableuse

Our mission at CII is to enable the growth of enterprises that work towards creating social and/or environmental impact, in aresponsible, transparent and sustainable manner. We use a variety of debt instruments to achieve this.We lend to sectors andcompanieswheredebtcapitalisscarceandmuchneeded.Here,wecanhavethemostimpact.Beyondthestandardsecuredloans,weextend unsecured loans and loans to pre-profit companies where we are convinced about the business model and profitabilityprospects.Inmanycases,weareanearly(insomecases,theonly)lender.Westructureourinstrumentstosuitthebusinessneedsofourportfoliocompanies.Wecontinueworkingwiththecompaniesastheymatureandtheirdebtneedsgrowandchange.OurimpactobjectivesareinlinewithsomeoftheSustainableDevelopmentGoals(SDGs)ortheGlobalGoals,auniversalcalltoactiontoendpoverty,protecttheplanetandensurethatallpeopleenjoypeaceandprosperity.AchievingtheSDGsrequiresthepartnershipofgovernments,theprivatesector(includinginvestorslikeusandtheenterpriseswesupport),civilsocietyandcitizenstomakesureweleaveabetterplanetforfuturegenerations.

ImpactObjectives


At CII, the environmental & social performance evaluation is anintegralpartofthecreditevaluationprocess.PRE-INVESTMENTInitialscreening:Weapplyapositiveaswellasanegativescreentoeachprospectiveportfoliocompany.Thecompanymusthaveastated or demonstrated focus that is in line with our impactobjectives. ItmustnotbeengagedinanyoftheactivitiesonourExclusion List. In sectors with greater risk of negativeenvironmentalimpact,additionalscreensareapplied.

Scorecard: We assess each company using a proprietary DueDiligence Scorecard and measure a “baseline” score. Thescorecard has several components including: a) Mission andImpactBusinessModel;b)Governance; c) Internal controls andsystems;d)Workerpractices;e)Products; f)Clientprotection;g)Community; and h) Environment. Any externalsocial/environmental ratings that the company may haveobtainedwillalsobetakenintoconsideration.INVESTMENTDECISIONThe Credit Committee evaluates the financial as well as thesocial/environmental rationale of every proposal. We considerfavorably, companies that take proactive steps to improve theirenvironmental, social and governance outcomes. If there areshortcomings in these areas that are highlighted following theduediligenceprocess,weengagewiththecompaniesandassesstheir willingness to improve. Some mutually agreed plans andgoalsmustbeinplacebeforetheinvestmentcangoahead.

TheProcess

Ataminimum,weexpectourportfoliocompaniestofullycomplywithallrelevantlawsandindustryregulations.Theyareexpectedto meet professional standards for internal and externalgovernance. In addition to these basics, we strongly prefercompanies that go above and beyond the minimum legalrequirement in improving their social, environmental andcorporategovernancepractices.

Documentation: Social and environmental considerations areincorporated in to all investment documentation, for e.g., KPIreporting, participation in industry initiatives, covenants andexclusionlists.Qualityandtimelinesofreportingisakeyinputintodecisionsonrepeatloans.

POST-DISBURSALMONITORINGOnce a loan ismade, portfolio companies are required to trackandreportdataonasetofkeyperformancemetricsidentifiedasbeing most appropriate for that company’s business. While weagreethattherearebenefitstostandardizingimpact-relateddataand have been active participants in industry initiatives in thisregard,thediversityinbusinessmodelsinsomeofthesectorsweoperate in (for ex, food & agri)makes this a challenge. In suchcases,wetrackperformanceusingcustomizedmetrics.Capability to track and measure performance varies dependingon the stage of the company and their internal capabilities.Wecontinue to engage with our portfolio companies on improvingmeasurementandreportingmechanisms.Wewillprovideadvice,supportandencouragement to thecompany to improve itsESGperformance.


InitialScreening InformationSharing1 2 3 4

5678

9 10 11 12

OnsiteDueDiligence

AdditionalData

Disbursement Documentation CreditCommittee

CreditProposal

MonthlyMonitoring

Onsitevisits LoanClosureRepeatloanmaybeconsidered

Impactbusinessmodelscreening Social/environmentaldata

Assessmentofenvironmental,socialandgovernanceaspects

InvestmentrationaleincludesESGperspective.Baselinedatashared

DecisionfactorsinESGIncludesclausesonE&Sreportingandethics

Social/environmentaldata

Obtainandreviewsocial/environmentalperformancedata

Decisionbasedonfinancial,repaymentaswellasESGperformance

FOOD&AGRICULTURE70% of rural households in India still depend primarily on agriculture for their livelihood. And yet, nearly a quarter of Indians do not getsufficientfoodtomeettheirdailynutritionalneeds.

Asmuchas67%of India's farmland isheldbymarginal farmerswithholdingsbelowonehectare (2.47acres),against less than1% in largeholdingsof10hectaresandabove.Theaveragesizeoflandholdingisestimatedas1.15hectares,showingadecliningtrendsince1970-71.Theproportionofnetirrigatedareatonetareasownwas45.70%,whichmeansthatforhalfthecountry'sfarmland,irrigationisyettoreachthefarmers,whorelyentirelyontherainsfortheircrops.

Increased investments are needed to enhance agricultural productivity, improve supply chain infrastructure and introduce technologicalinnovationsacrossallstagesinthesupplychain.Weneedtoimprovetheincomesofsmallandmarginalfarmersthroughproductiveresourcesandinputs,knowledgeandtimelyinformation,accesstofinancialservicesandmarkets.Weneedtoidentifywaystoreducewastageinthepostharveststagethroughtechnologyandsupplychaininnovationstoenablegreaterrealizationofvalueforthefarmer.

Fromanenvironmentalstandpoint,weneedtoensuresustainablefoodproductionandagriculturalpracticesthatincreaseproductivityinawaythathelpsmaintainecosystemsandconserve/improvelandandsoilquality.


Food&Agriculture

Ourobjective:To enable the growth of small andmedium food &agribusinessenterprisesthatwillincreasethecapacityandoutreachofagriculture and allied sectors, promoting economic strength andstabilityinruralcommunitiesandfoodsecurity.

Withtheaimofunlockingvalueacrossmultiplesupplychains,weinvestinenterprisesthat:

1.Aggregate,processandsellagriculturalproducts;

2.Providegoodqualityaffordableinputstofarmers;and

3. Strengthen the supply chain by providing support services(technology,storage,transportation,qualityassessment,etc).

Companiesinourportfoliothisyear:

FY2015

FY2016FY2017

ClientRelationships

CIIPortfolioGrowth

275370 325

190

382434


FY2015 FY2016 FY20170

500

250

NumberofLoans

11

25

34

FY2015

FY2016

FY2017

0 10 20 30 40

9ofthe11companiesinourportfolioattheendofFY17,werepre-profitwhenwemadethefirstloantothem.Sincetheirfirstloan,5of themhadaCAGRbetween25-50%and2of themhadaCAGRabove 100%. Together, these companies raised INR 672 Mn inequityduringFY17.

operate across multiple supply chains (milk, fruits, pulses,vegetablesandorganicprocessedfoods);

provide cold chain solutions to reduce losses in the supplychain;

usetechnologytoenablereal-timetrackingofthesupplychain;

provideeco-friendlypestcontrolsolutions;

enable productivity improvement by manufacturing low costfarmingimplements;

use agribyproducts to make handicrafts thus providingemploymenttolocalartisans;and

provideweatherprediction, cropmonitoring, yield forecasting,pest forecasting, UAV, remote sensing, GIS, agri input planning,etc.

TypeofCompanies

93

4

Production,Aggregation,Processing Inputs Supplychain

Cumulativeuniqueclients

ClientswithatleastoneactiveloaninFY17

ActiveloansduringtheFY


With>3loans:4

Withrepeatloans:9

AttheendofFY17:11

Duringtheyear:16

CAGR>100%:2

CAGR>50%:4

CAGR>25%:9

NumberofActiveClients

Food&Agriculture:Snapshots


OurFood&Agriportfoliocompaniesoperateinvariouspartsofthevaluechainandinamultitudeofcommodities.Hereareafewsnapshotsfromourportfoliothatdemonstratethediversityofbusinessmodelsthatwefundinthissector.

Companiesthataggregate,process,andsellagriculturalproduce

INI Farms is a horticulture company focused on pomegranates andbananas. It is deeplyinvolved in the value chain all the way from cultivation to marketing. The companycultivatesonitsownfarmsandalsocarriesoutcontractandpartnershipfarming,advisingfarmers on improving production quality. The company sells packaged whole fruits andpomegranate seeds. Exports account for over 60% of revenue. The company has beenGlobalG.A.Pcertified.

INI’sadvicehelpsfarmersimproveproductionqualityandhavebettermarketlinkages,allofwhichcanresultinapriceadvantage.FarmersinneighboringareasarealsoimprovingtheirfarmingpracticesincertainlocationsduetothepresenceofINI.

Companiesthatprovideinputstofarmers

BarrixAgroSciencesdevelopsandpatentsAbbreviatedNewPheromones (ANPs) andANPApplications,whichalleviate theproblemofpestswithoutusing chemicalpesticides.Thepheromone solution reduces the use of chemical pesticides and encouragesenvironmentallysustainablefarming.Thecompanyoperatesacross12statesinIndia.Morethan243,000farmersand813,000acreshavebeencoveredbyBarrixproducts.

BarrixhasrecentlyexecutedcontractswiththestategovernmentsofAndhraPradesh,BiharandJharkhand.Thecompanyexports toBangladeshandSriLankaand is lookingto furtherexpand internationally.ThecompanywasrecentlyawardedtheTIMEStartupInnovatoroftheYear(2017).

Companiesthatstrengthenthesupplychainthroughsupportservices

Ecozen manufactures affordable and efficient energy access products for theagriculture supply chain. Ecotron, the company's major revenue source, is a solarpump controllerwith a highly interactiveweb interface that allows the user to live-track the system's performance. Ecozen's analytics engine then helps ensure quickresponsetimesandreducesservicecosts.

The company also manufactures a solar-powered micro cold storage called Ecofrost. Given the mobility andremotemonitoringcapabilitiesoftheproduct,thiscoldstoragecanbeusedforavarietyofproductsandavarietyoflocationswheregridelectricitymaynotbeadequate.

The company currently operates in 6 states. As of FY 2017, the Company sold more than 2400 solar pumpcontrollers,190solarpumpsand13coldstorages.

Stellaps is an agri-tech "internet of things" company that provides end-to-end technologysolutions forthedairysupplychain. Itprovides farmautomationservicesaswellassupplychainmonitoringsolutionsfordairyfarmers,dairycompaniesandco-operatives.Itcurrentlyoperates across Karnataka, Tamil Nadu, Kerala, Maharashtra, Gujarat and recently beganoperationsinRajasthanandPunjab.

Thecompany'sSmartAutomaticMilkCollectionUnits,placedatthemilkcollectioncentres,testthemilkandgivethefarmeraprintedreceiptofthequalityandamountpayable;alocallanguagetextmessageisalsosenttothefarmers.Thistypeofsystemistypicallyusedinco-operativesandprivatecompanieswheremilkiscollecteddirectlyfromfarmers.Thecloud-basedbackendallowsthecompanytoaccessrealtimeinformationatalowcost.

Otherofferingsinclude'SmartFarms'-integratedsystemsfortheautomatedmilkingofcowsindairyfarms-and'Contrak'-remotesensingdevicescapableoftrackingtemperature,volumeandanyinflowsoroutflowsinrealtimethusenablingremotemonitoringofthesupplychain.

Food&Agriculture

10.0%

85.0%

5.0%

SupplierFarmers FarmerswhoreceivedinputsFarmerswithimprovedefficiency(technology)

3

1

1

1

6

2

5

2

4

8

8

8

4

1

1

4 4

2

3

3

CaspianImpactInvestments:SocialPerformanceReport2017

CumulativeDisbursementssinceinception.

INR975MILLION

ofAnnualDisbursementsweretoFood&Agricompanies.

19%

Relationshipssinceinception.

18

ofportfoliocompanieswererepeatclients, takingmorethanoneloanfromCII,28%availedofmorethan3loanstilldate.

56%

ofportfoliocompanieshadCIIasafirstorsecondlender,beforetheycouldqualifyforotherinstitutionalfinancing.

19%

outof16activeportfoliocompaniesinFY17wereEBITDAnegative at the time of their first CII loan. 4 of themturnedpositivethisyearonaquarterlybasis.

6

11

Metrics IRISMetric FY2015 FY2016 FY2017

NumberofCompanies NA 8 12 16

NumberofFarmers* NA 73,404 327,502 346,580

AreaCultivated(Acres)** PI7403 107,637 691,451 1,053,091

NumberofFullTimeEmployees

0I3160 2,080 1,750 3,191

Theportfoliocontinuedtobewelldiversifiedacrossregionandcommodity.6portfoliocompaniesoperatedacrossmorethantenstateswhiletheremaining10operatedmainlyinthesouthern,centralandwesternpartsofIndia.

Farmeroutreachincreasedby~9%,duetothegrowthofourportfoliocompaniesandtheadditionof3newclientsthisyear.

8 of our 16 clients have certifications orexternal ratings covering different aspects of their operations. These include GLOBAL G.A.P,Sedex,HACCP,OrganicCertification,FairTradeCertification,andinonecase,M-Cril.

*NumberoffarmersisabroadoutreachfigureandincludesfarmersfromwhomourF&Acompaniespurchasedirectly,farmerswhoreceiveinputsandadvicefromourcompanies,andthosewhopurchaseproductsandservicesfromourclients.ItreferstofarmersincontactwiththecompanyasonthelastdateoftheFY.

#activecompanieswithoperationsineachstate&UTinFY17

Geographicalpresenceofcompanies

FoodandAgriOutreach

NumberofFarmers:Classification

**AreacultivatedreferstototalacreageundermanagementduringtheFY,directlyandindirectly.Thelandmayproducecropsforprocurement,ormaybecoveredusingourclients'inputs.

AggregateddataforallcompaniesinourportfolioforthemajorpartofFY17

7

5

SMALLBUSINESSFINANCEMicro,mediumandsmallenterprises(MSMEs)contributetomorethan30%ofIndia'sGDPandareprolificjobcreators.Thereareanestimated51MnMSMEsinIndiaacrossvariousindustries,employing117millionpeople.Andyet,avastmajorityofthemdonothaveaccesstoadequatecredit, forgrowth.Poor infrastructureand inadequatemarket linkagesare theotherkeychallenges thatconstrain thegrowthof thiscriticalsector.

In order to achieve higher levels of economic productivity, we need to support productive activities, job creation, entrepreneurship andinnovation. We need to encourage the formalization and growth of micro-, small andmedium-sized enterprises, including through accesstotimelyandappropriatefinancialservices.


SmallBusinessFinance

Our Objective: To support the growth of small enterprises in theinformalsegment,creatingincreasedemploymentopportunitiesfor lowincomecommunities.

FY2015FY2016

FY2017

ClientRelationships

CIIPortfolioGrowth

368500 430

380

607 726


FY2015 FY2016 FY20170

250

500

750

NumberofLoans

13

24

30

FY2015

FY2016

FY2017

0 5 10 15 20 25 30

Metrics IRISMetric FY2015 FY2016 FY2017

NumberofPortfolioCompanies NA 9 11 14

NumberofMSMEs PI9652 224,547 319,673 410,003

PortfolioatRisk>90days FP6373 1.12% 2.05% 3.44%

NumberofFulltimeEmployees OI3160 4,079 6,403 10,116

NumberofJobsintheunderlyingenterprises('000s)

PI4874 351 350 533

NumberofStatescovered NA 16 20 27

NumberofBranches NA 528 1,058 1,208

SmallBusinessFinanceOn-lendingPortfolio

16,20311,459 12,643

10,40514,461

27,767

Disbursements(INRMn)PI7569 PortfolioO/S(INRMn)PI5476

FY2015 FY2016 FY20170

10,000

20,000

30,000

ActiveduringtheFY

SmallBusinessFinanceOutreach

Ourportfolio companies collectivelyearned revenuesof INR10,597Mn and employed 10,116 full time employeeswhile the underlyingMSMEsthattheylenttosupportedoverhalfamillionjobs.



Over the past few years, the small business finance space hasevolved significantly. Today, we have, in addition to conventionalbrickandmortarplayers, 'fintech' lendersthatusedataanalyticstomake lending decisions quickly, and other lending platforms thatconnectlenderswithsmallbusinessborrowers.SomelendersfocusonspecificSMEsegmentswhileothersaremorediversified.Thenewsmall finance banks, most of which have commenced bankingoperations,willalsoleadtoanincreasedfocusonthisspace.

Ourportfoliocompanies in thissectoruseamixof technologyandtouchtolendtosmallbusinesses.Somelendersspecialiseinspecificsegments such as education, or specialise in geographical clusters,whileothersspecializeinapproachintermsoftheirproductoffering.

Duringtheyear,wefinanced14SmallBusinessLenderswithaloanportfolio of INR 27,767Mn and an active enterprise client base of410,000.

MICROFINANCEMicrofinanceistodayamatureindustryinIndiawithphenomenalgrowthoverthepastseveralyearsbuoyedbyincreasedcapitalflowsintothesectorincludingfrommainstreaminvestors.Thesectorfacedamajorcrisisin2010,butrecoveredwellandeventhrivedsincethen,aided by central bank regulation, self-regulation through industry bodies and the establishment of credit bureaus. In a significantdevelopmentduringthelastfiscalyear(FY15-16),8MFIsobtainedsmallfinancebanklicencesfromtheReserveBank(atotalof10licenceswereissued).

AttheendofFY2017,theindustryhadaportfolioofINR924Bn/USD14Bn(excludingINR145Bn/USD2.2Bnof6SFBs),agrowthof26%overFY16.Approx.39millionclientsareservedbyNBFC-MFIsandSFBs.

Duringthisyear,theindustryfacedasignificanthitfromdemonetization,giventhelargelycash-basednatureofmicrofinancetransactions.Mostcompaniesarestillonthepathbacktonormalcy.


MicrofinanceOurObjective:Toenable increasedaccesstofinancialservicesforthelowerincome,entrepreneurialpoorandfinanciallyexcludedsegmentsofthe population and enable them to better manage their financialresourcesandattainfinancialstability.

Demonetisationanditsimpact:

During this financial year, Microfinance institutions across thecountrywereimpacted,somequiteseverely,bydemonetisation(theGovernment'sdecisiononNov8toscrapcertainhighvaluecurrencynotes (INR500and INR1000).Giventhepredominantlycash-basedoperations, collectionsplummeted in the immediate aftermath ofthisannouncement,withafewregionalexceptions.

Withgradually improvedcashcirculation,collectionswereexpectedtoimprovebyMarch/April2017.Howeversomestates(UP,UK,MH,HR,DL,PN,KA,MP) continued to showdeclining collectionsdue topolitical factorsandrumorsofa loanwaiver.AsofMarch2017 theindustry PAR 30+ was 11% and PAR 90+ was 5%. With the RBIdispensationonNPArecognition*,thefullfinancialimpactmayonlybefeltinFY18.

DuringFY2017,theGrossLoanPortfolioofNBFC-MFIsgrewby25%over FY16 (YoY) and 5% over Q3FY17 (QoQ), the slowest in manyyears.AsMFIscontinuetheireffortstostabilize,growthisexpectedto slow downin FY 2018, at25-30%, compared to 50-60% annualgrowthachievedinthepastfewyears.

OurMicrofinancePortfolio

Microfinance formed 20% of our year-end portfolio and 20% ofannualdisbursements,aconsciousreductionfrompreviousyears,infavorofamorediversifieddebtportfolio.Weendedtheyearwith17activemicrofinancerelationshipscomparedto16 thepreviousyearandthenumberofloansoutstandingreducedfrom24attheendofFY16to22attheendofFY17.

StartingFY16,wealsolendtofinancialinclusionenablers.Duringthisyear, we had three such companies in our portfolio - twobanking correspondents that source microfinance loans for banksand other partners and one rural-focused e-commerce companypartneringwithMFIstodelivermobilephonestoMFIclients.

FY2015

FY2016FY2017

ClientRelationships

CIIPortfolioGrowth

350600

343

442

705571


FY2015 FY2016 FY20170

500

1,000

NumberofLoans

12

24

32

FY2015

FY2016

FY2017

0 5 10 15 20 25 30 35




MicrofinanceOn-lendingPortfolio

58,735

140,163 147,65547,663

119,951131,741

Disbursals(INRMn) PortfolioO/S(INRMn)

FY2015 FY2016 FY20170

50,000

100,000

150,000

*TheRBIprovidedanadditionalperiodof90daystoclassifyaloanaccount(upto1Cr)asanon-performingasset,forduespayablebetweenNovember1andDecember31,2016

(IncludestheBCs'portfolio)

Metrics IRISMetrics FY2015 FY2016 FY2017

NumberofPortfolioCompanies NA 10 12 16

NumberofActiveClients('000s) PI9327 3,548 7,033 10,070

WomenClients% PI8330 99.0% 97.8% 99.7%

RuralClients% PI1190 38.0% 60.2% 69.9%

UrbanClients% PI6751 62.0% 39.8% 30.1

PortfolioatRisk(PAR)>30 FP2635 0.16% 0.27% 16.99%

PortfolioatRisk(PAR)>90 FP6373 0.11% 0.19% 7.81%

NumberofFullTimeEmployees OI3160 10,280 22,134 30,094

AverageLoanSize PI5160 13,435 16,830 13,066

NumberofStates&UTscovered NA 19 26 28

NumberofBranches NA 1,254 2,629 3,823

AdditionalEquityRaised(INRMn) PI4142 3,980 4,273 13,492

The total number of active clients of the MFIs in ourportfolio increased by ~43% to ~10 Mn. The number ofemployeesgrewby~36%to30,094.

PAR>30and PAR>90, at 16.99% and 7.81% respectively,have shown a sharp increase as a result ofdemonetization.

MFIsinourportfoliocovered25statesacrossthecountry.CII's maximum single state concentration was at 22%(TamilNadu).

All the NBFC-MFIs and SFBs in our portfolio reported toone or more Credit Bureaus during the year and aremembers of MFIN, the self-regulatory body. 5 of ourclientshaveactiveSMARTcertifications.

Microfinance


MicrofinanceOutreach

CIIexposurebystates&UTsattheendofFY17

Geographicalconcentrationofportfolio

AFFORDABLEHOUSINGInrecentdecades,theworldhasexperiencedunprecedentedurbangrowth.Indiaisnoexceptionwithoururbanpopulationgrowingby2.3%annually. Rapid urbanization brings enormous challenges, including growing numbers of slum dwellers and inadequate basic services and infrastructure.Themostbasicneed,thatofhousing,isavastunmetneed.ThecurrenturbanhousingshortageinIndiaisestimatedtobe19 millionhomes,withtheeconomicallyweakersectionsandlowerincomegroupsaccountingfor96%ofthisshortage.

Inthepastcoupleofyears,theGovernment'sreformagendahasbroadenedanda"HousingforAll"programwaslaunchedin2015thataimstobuild 20millionurbanhomesby2022.Variousincentivesarealsobeingextendedtotheprivatesectortoencourageagreaterfocusonaffordablehousing financeaswellashousingdevelopment.TheRealEstate(Regulation&Development)Act,2016cameintoeffectduringtheyear,aregulationthat appliestohousingdevelopers(hithertounregulated)andaimstoimprovetransparencyandcompliance.

Since2009,whenthefirstdedicatedmicro-mortgagecompanywassetup(MicroHousingFinanceCorporation,aCaspiangreenfieldinvestee throughourequityfund),morethan17otherHFCswithafocusonaffordablehousingfinancehavebeenlicensedwiththeNationalHousing Bank. While their share of the overall housing market remain very small,the favorable policy environment, the vast unmet demand and theexcellentfinancialperformanceofthesenewcompaniesthusfar,isresultinginstronggrowth.



AffordableHousingOur Objective: Good quality housing has the potential to improvehealth,hygiene,education,andoverallqualityoflife.Byprovidingdebtfinance to affordable housing companies (finance, development,rentals),wesupportthescaleupofaffordablehousingsolutionsforlowincome and informal segment households, enabling larger homeownershipand/oranupgradationinexistinghousingconditions.

OurHousingPortfolio

Affordable Housing formed ~13% of our year-end portfolio and~24% of annual disbursements. Our cumulative disbursement inthissectorsinceinceptionisINR575Mn.

The portfolio includes micro mortgage companies, homeimprovement companies,affordable housing developers and onerentalhousingprovider.

Housing Finance: We have one housing finance company in ourportfolio this year which extended loans for home acquisition. Ithad9,651activeclientsattheendoftheyear,56%ofwhomwerewomen.

Home Improvement: We worked with a non-profit MFI based inTamil Naduthat has worked almost exclusively in the water andsanitation space for over two decades. TheMFI provides loans tolow income rural and urban householdsfor the purpose ofconstructingwaterandtoiletfacilitiesandhad23,278activeclientsattheendoftheyear,100%ofwhomwerewomen.

HousingDevelopment:Thetwohousingdevelopmentcompaniesinour portfolio have launched the construction of 6,907 homes ofwhich~68%havebeensold.

RentalHousing:Our portfolio company, Aarusha Homes providesgood quality and short term rental housing solutions to urbanmigrantswhomovetothecitiestoworkintheorganizedsectororfor higher education. Aarusha offers good quality rooms, food,purifiedwater,securityandotheramenities.Thehostelsarelocatedinstrategiclocationstomakeiteasierfortheirclientstocommute.~40%of their clients arewomen.AsofMarch2017, the companysetup21hostelswith4,745beds,withanoccupancyrateof~65%.

NumberofRelationships

2 2

2

1 1

2

1

1

HFCs Developers HomeImprovement RentalHousing

FY2015 FY2016 FY20170

2

4

6

CII'sPortfolioGrowth

50 50

410

57 74

292


FY2015 FY2016 FY20170

100

200

300

400

500

3793millionHFCandMFILoanportfolio32,929

Clienthouseholdsreceivedhousing/homeimprovementloans

87%ofloanclientswerewomen

6,907Homeslaunched/underconstruction


HousingFinanceOn-lendingPortfolio

1,817

1,215

3,793

PortfolioO/S(INRMn)PI5476

FY2015 FY2016 FY20171,000

2,000

3,000

4,000

584Employees

AffordableHousing:ClientSnapshotThe two affordable housing project developers in our portfolio create housing stock at a price point accessible to the low and middleincomesegmentwheredemandfaroutstripscurrentsupply.

The mission of DBS is to make market-based and affordablehousing solutions available to low income groups that have verylimited or no access to the formal real estate market. Given themassive housing shortage in the country for low incomepopulations,DBS is focusedonputting inplacea systemof largescalemassproductionofaffordablehomes.Thecompany'svisionistodeliver10,000housesby2019.

OurloantoDBSisforaprojectnearanindustrialareainGujarat.Buyers are primarily blue-collar workers from nearby factories. Inthisproject,thecompanyisbuilding376residentialunitsofvaryingconfigurations-87%oftheunitsare1-2roomapartments.

Buyercomposition(%)

Self-employed Salaried Retired

Buyerincomeprofile(%)

> 5Lakhs 3-5Lakhs 1.5-3Lakhs <1.5Lakhs

VBHCValueHomesprovidesaffordablehousinginthepricerangeof INR 15 -35 lakhs in urban areas. The Company currently hasprojects in the suburban areas of Bangalore, Chennai, Mumbai,and National Capital Region (“NCR”). The company's focus onbuildinghighqualityhousingstockatanaffordablepricepointona large scale makes it a potential leader in this space. VBHC hasbeenaCaspianequityinvesteesince2011.

Amajorityofitscustomerbasecomprisesfirsttimehomebuyers.85%ofBuyersaresalariedindividuals.57%earnlessthanINR5Lakhs/USD7,500annually.

Buyercomposition(%)

Self-employed Salaried Retired Housewives Students

Buyerincomeprofile(%)

> 5Lakhs 3-5Lakhs 1.5-3Lakhs <1.5Lakhs

61%oftheirbuyersareself-employedand73%haveannualhouseholdincomeoflessthanINR5Lakh/~USD7500.

The company works with partner-NGOs on marketing andfinancialliteracytrainingandwithhousingfinancecompaniestofacilitate mortgage finance for the buyers. DBS CommunitiesobtainedaGIIRSratingin2015-thecompanygota4Starratingfor Operations (ESG) and a Platinum rating for their ImpactBusinessModel(IBM).

VBHCworksonauniquemodelthatconsiderslandasinventoryinsteadofacapitalassetthatappreciateswithtimeandusesanassembly line approach to construction and development, withstandardizeddesign,materials,executionprocessesandcontrolfunctions.

The company has a major focus on energy efficiency. TheirprojectatAnekal(thecompany'sfirst)isAsia’sfirstExcellenceinDesignforGreaterEfficiencies(EDGE)certifiedbuilding,aGreenstandard adopted by IFC. To qualify for certification, a newbuilding must achieve a 20% reduction in energy, water, andembodied energy in materials compared to a conventionalbuilding.

DBSAffordableHomeStrategy

VBHCValueHomes


HEALTHCAREHealthcare delivery in India has improved significantly but we continue to lag in terms of Key Health Indicators. In addition to the vastinfrastructure gap(we need 3.5 million additional beds, 2-3 million doctors and 6 million nurses), there is a severe shortage of skilledmanpower,especiallyinruralareas.50%ofthepopulationtravelmorethan100kmstoaccessahigherlevelofcare.Publicexpenditureoncorehealthcareisonly1%ofGDPinIndia.Thereisalsoaclearurbanbias:morethan80%ofdoctorsaresituatedinurbanareas.Overtheyears, Indiahasseenmassiveactivity intheprivatesectortoaddresstheseveregapsinhealthcare infrastructureanddelivery.Theprivate sector today dominates the healthcare delivery segment, with a 72% share in total healthcare spend, 74% of hospitals and 40% ofhospitalbeds.Theprivatesectorhasintroducedarangeofinnovationsinhealthcaredelivery-identifyingkeypainpointsinthesupplychainandsettingupinitiativesthatespeciallyaddressthelowincomemarket.


HealthcareOurObjective:Toenableimprovedaccesstoqualityhealthcareatanaffordablecost.Whileourfocusisonenablingbetterhealthcareaccessforlowincomepopulations,clientprofile(ex-bluecollarworkers)andregion(TierY/Zlocations)serveasaproxyforthis.

WeaddedHealthcare toourmandate inFY2016.Wesupport thegrowth of commercially viable companies that provide improvedaccesstohealthcareforunderservedpopulationsbyeitherbuildinga physical healthcare distribution channel, or by using technologysolutionsthatimproveefficiencyandreducecostofdelivery.

OurHealthcarePortfolio

We ended FY 2017 with 3 healthcare companies in our portfolio.Thesecompanieshavedistinctbusinessmodels:

1) Providing primary healthcare access to workers by setting up andmanagingclinicsinfactoriesandotherofficelocations;

2) Providing affordable eyecare in underserved regions by setting upfullyequippedsurgicalhospitalsinTierYorZlocationsandprimaryeyecarecentresinsmallerlocations;and

3)Distributingmedicaldevicesandconsumablestosmallandmediumsized hospitals, nursing homes, single doctor clinics and resellers,primarilyinnon-TierXlocationswherethereislimitedaccesstomedicaldevices.

CIIPortfolioGrowth

5

25

5

27


FY2016 FY20170

10

20

30

FY2016

FY2017

NumberofRelationships

NumberofLoans

1

4

FY2016

FY2017

0 1 2 3 4

MedicalconsultationsduringtheFY

312,677

Factorieswhereprimaryhealthcarefacilitiesareoperational

23

PrimaryHealthcareclinicsoperatinginTierY/Zlocations

20

OPDeyecarepatients

67,49842,063

Eyecarehospitals/clinics9170

Eyesurgeriesconducted

671

(Thisdatapertainstothe1primaryhealthcareproviderintheportfolio) (Thisdatapertainstotheaffordableeyecareproviderintheportfolio.DatapertainstooperationsinthelastquarterofFY17)


1 3


PrimaryHealthcareOutreach AffordableEyecareOutreach

Childrentreated/consulted

EyeCampsconducted


CLEANENERGY&ENERGYEFFICIENCYNearly~50millionruralhouseholdsinIndiahavelittleornoaccesstogrid-basedelectricityandrelyinsteadonkeroseneastheirprimarysourceoflighting,whichresultsinenvironmentalpollutionfromcarbonemissionsaswellaschronicillnesses.Beyondelectricity,thesecommunities/householdshavescarceaccesstomodernformsofcookingenergyorenergyforpurposeslikeirrigationandotherproductivecauses.

Inadditiontoenablingaccesstothosewholackaccessorhavehighlyerraticaccesstogridpower,asustainableenergyfuturerequirestransitionfromfossilfuelbasedenergysourcestocleanandrenewablesourcesaswellaslargescalereductioninenergyusethroughtheadoptionofenergyefficientproductsacrossbothhouseholdsandotherestablishments.


CleanEnergy&EnergyEfficiency

OurObjective:Toenableaccess to cleanenergy for segmentsof thepopulation without access to the grid, to increase the adoptionof renewable energy by the general population in order to reduceconsumption of fossil-fuel based energy, and to support the adoptionofenergyefficientproductsandsolutions.

We added clean energy & energy efficiency to our mandate inDecember2016.Welendtocompaniesthat:

a) Provide clean energy access to un-served/ underservedhouseholds and businesses that either lack, or have erratic, gridaccess;b)Providecleanenergyaccesstohouseholdsandenterprisesthathavegridaccessbutwishtoadoptrenewablesources;c)Operateintheenergyefficiencyspaceandthroughtechnologicalinnovation,significantlyreduceenergyconsumption.

As of March 2017, we had 1 energy efficiency company in theportfolio.

Silvan InnovationLabs.Silvan isahomeautomationtechnologycompany that allows customers to control multiple homeappliancesanddevicesusingtheirsmartphones.

Productofferingsincludemotionsensingsmartlightingsolutionsand security solutions. Silvan caters to both the B2C and B2Bbusiness segments. Its products result in increased energyefficiencyandamorejudicioususeofelectricity.

AsofMarch 2017, Silvanhas executed 41 energy efficiencyprojectsandhasinstalleditssmartsolutionsin382homes.

ClientSnapshot:SilvanInnovationLabs


Other Sectors

Hippocampus operates low cost, high quality pre-schools forchildren aged 3 to 6 years in small towns and villages. Theschools have holistic curricula which focus on learningoutcomes. The company has 300+ learning centres and 4schools.

AsofMarch2017,wehad3portfoliocompaniesfromamongthesefivecategories-twoarefeaturedbelow.

Waterlife provides potable water to rural communities byinstalling and operating community water purification plants.Capex is covered by government or CSR partnerships, whilemaintenance and operating costs are paid for by customers.Waterlifealsocreatesjobs,byhiringandtrainingoperatorsfromlocal villages to operate, maintain, and service the purificationplants, and by establishing a distribution network of localentrepreneurstodeliverwatertoremotepartsofthevillage.

TowardstheendofFY2017,weaddedthefollowingsectorstoourmandateaspartofourongoingdiversificationstrategy.

9,215Pre-schoolstudents

3,045Students(ownschools+partnerschoolsusingHippocampustools)

4 294 26Schools LearningCentres SchoolPartners

8Statescovered

386Waterpurificationplantscurrentlyoperational

175 9%LocalPlantOperators WomenOperators


ClientSnapshots

HippocampusLearningCentres Waterlife

LearningCentresincl.45Franchisees

EducationandSkillDevelopment

Livelihoods ICT&Physicalconnectivity

WaterandSanitation Environment

Deliveryofgoodquality,affordableeducationandskill

developmenttrainingtolowerincomeor

underservedcommunitiesincludingthedifferently-abled.

Enablelargescalejobcreationor

improvedincomeforunemployedorunder-employedsectionsof

society.

DevelopICT-basedorphysicalchannels

thatenableaccesstoproducts,servicesand/oreconomicopportunities.

Accesstosafedrinkingwaterandsanitation,

promotingbetterhealthand/orconservationof

theenvironment.

Contributetowardsahealthierplanetby

providingoradoptingeco-friendlyproductsor

services.

CorporateSocialResponsibility(CSR)The approach to CSR must integrate with the core businessstrategy, address the well-being of all stakeholders and not justthecompany’sshareholders.PhilanthropicactivitiesarebutapartofCSR.

By this measure, Caspian's core mission, strategy and focusreflect a deep commitment to corporate social responsibility. Wehave gone a step further in 2017 by becoming a Certified BCorporation(seesectiononBCorp).

In accordance with Schedule VII of the Companies Act, 2013, wechoseEducationasthefocusforCIIforFY2017.Wehaveworkedwiththefollowingpartnerinstitutionsduringtheyear:

1.SageSevaSociety

Sage Seva Society is a non-profit founded in 2007 with theprimary objective of providing quality Education to underprivilegedchildreninremoteruralareasatanaffordablecost.

TheSageSocietycurrentlyrunstwoSchools,oneeachatChennurandMedaripet,bothinAdilabaddistrictinTelangana-identifiedas one of the 50 most backward districts in the country by theGovt.ofIndia.Tribalsconstituteasignificantportionofthedistrictpopulation.

During this financial year, we have provided financial support toSage for the purpose of improving the general infrastructure inthese two schools including adding a library, improving audio-visualaidsandcomputerfacilities.

2.ParinaamFoundation

Parinaam’sAcademicAdoptionProgramisdesignedtotransformthelivesofdesperatelypoorchildrenbyprovidingthemaccesstohigh quality education in the English medium through academicscholarships. It is a program wherein generous patrons adopt achildtosponsorhis/herstudiesuntilcompletionofschoollife.

We have sponsored the school education of 37 children underthisprogram.

2.Janaagraha

Janaagrahaiswidelyrecognisedasthecountry’sleadingadvocatefor large-scale urban reform and civic participation. Janaagrahaworks with citizens on catalysing active citizenship inneighbourhoods and with governments to institute reforms tocity-systemsacrossthefollowingprogrammes.

Janaagraha believes that Good citizenry is the key to buildinghealthy and vibrant cities. The children of today will be the adultcitizens of tomorrow, and will play a vital role in developing ourfuturecommunities.

Towards this, in 2001, Janaagraha started the Bala JanaagrahaProgram, a civic education program, which aims to transformtoday’s children into informed, responsible and active citizens.Theprogramisdesignedtoenablecriticalthinkingwhenitcomesto addressing local civic challenges. In the long run, Janaagrahaexpects a multiplier effect that will lead to the creation of youthleaders, who can be agents of change in their homes andneighborhoods.

The Program is currently in its 15th year and has grownsubstantially.From5schoolsreaching700studentsinBangalorein2002,theprogramnowcovers25citiesacrossIndia,withmorethan40,000studentsin536schools(includingHyderabad).

During FY 2017, we have provided financial support for theimplementation of the Bala Janaagraha program across 16schoolsinHyderabad.

3.InternationalAssociationforHumanValues(IAHV):

IAHVprovidesaccesstofreeandholisticeducationtoover39,000underprivilegedchildreninslum,tribalandruralbeltsacrossthecountry.Theyhaveestablished>400schoolsintribal,urban/slumand rural areas across the country including Jharkhand, WestBengalandTripura(NorthEastIndia).

We have worked with IAHV for the past three years, focusing ontheschoolstheyruninthethreetribalvillagesofDadika,KalchitiandChakdohainGhatsila, Jharkhand.InFY 2015, we contributedtowards the installation of solar-powered digital classrooms inthese tribal schools. In FY 2016, we funded the student mid-daymealprograminthesameschools.

DuringFY2017,wecontinuedoursupportofthestudentmid-daymealprogram.


CaspianisaCertifiedBCorporation

OnJune20,2017,CaspianbecameaCertifiedBCorporation.

BCorpsarefor-profitcompaniesthatusethepowerofbusinesstosolvesocialandenvironmentalproblemsinanethicalandtransparentmanner.

CaspianisthefirstIndianImpactInvestingfirmtobegrantedaBCorpcertification.

TheBCorpcertificationbyBLabconfirmsthatCaspianmeetsrigorousstandardsofsocialandenvironmentalperformance,accountability,andtransparency.Duringtheprocess,wehavebeenevaluatedonhowourpracticesimpactouremployees,ourcommunity,theenvironment,andourcustomers.BCorp'smeasurementpracticesaredynamic(theyareupdatedeverytwoyears)andtailoredtosize,industryandlocation.

Theminimumqualifyingscoreis80outof200.Ourscorewas109.7.Themedianscorefor"BestfortheWorld"BCorpsis131.

Today,thereareover2,100CertifiedBCorpsacross50countriesand130industries.Weareproudtojointheminredefiningsuccessinbusinessandbuildingafuturewhereeveryoneusesbusinessasaforceforgood.

ThecorevaluesthatCertifiedBCorpsembodyareinperfectalignmentwiththewaywehaveconductedbusinessatCaspiansincewewerefoundedin2004.Asanimpactinvestmentmanagerinvestingonlyinentrepreneursandbusinessesthatsolvesocialorenvironmentalproblems,weholdourselves,aswellasourportfoliocompanies,tohighstandardsofgovernance,transparency and ethics. We believe in working for the benefit ofall stakeholders, including employees and the widercommunity.


GlossaryAbbreviations:

1.G.A.P:GoodAgriculturalPractices.2.GIIRS:GlobalImpactInvestingRatingSystem(http://b-analytics.net/giirs-funds)3.HACCP:HazardAnalysisandCriticalControlPoints4.HFC:HousingFinanceCompany5.MSME:Micro,Small&MediumEnterprises6.MFI:MicrofinanceInstitution7.NBFC:NonBankFinanceCompany8.NBFC-MFI:NonBankFinanceCompany-Microfinance9.NHB:NationalHousingBank10.SBF:SmallBusinessFinance14.SDGs:SustainableDevelopmentGoalsorGlobalGoals(https://sustainabledevelopment.un.org/sdgs)15.SME:Small&MediumEnterprises

Definitions:

1.AffordableHousing:PertheReserveBankofIndia(RBI),thecostofaffordableresidentialpropertyshouldbelessthanRs65lakhinthe6metrocitiesandlessthanRs50lakhinnon-metros.Priorto2014,thelimitwasuptoRs25lakhformetrosandRs15lakhfornon-metros.2.EWSandLIG:EWShouseholdsaredefinedashouseholdshavinganannualincomeuptoINR3,00,000.States/UnionTerritoriesshallhavetheflexibility to redefine theannual income criteria asper local conditions in consultationwith theCentre. LIGhouseholds aredefinedashouseholds having an annual income between INR 3,00,000 and INR 6,00,000. States/Union Territories have the flexibility to redefine theannualincomecriteriaasperlocalconditionsinconsultationwiththeCentre.(http://mhupa.gov.in/writereaddata/HFA_guidelines_March2016-English.pdf)3 .Global GAP: GLOBAL GAP is an internationally recognized set of farm standards dedicated to Good Agricultural Practices (GAP).Throughcertification,producersdemonstratetheiradherencetoGLOBALG.A.P.standards.4.IRISMetrics:IRISisthecatalogofgenerally-acceptedperformancemetrics.IRISismanagedbytheGlobalImpactInvestingNetwork(GIIN),anonprofitorganizationdedicated to increasing thescaleandeffectivenessof impact investing.TheGIINoffers IRISasa freepublicgood tosupport transparency, credibility, and accountability in impact measurement practices across the impact investingindustry.https://iris.thegiin.org5.LowIncomeStates:UttarPradesh,Bihar,MadhyaPradesh,Odisha,Chhattisgarh,Jharkhand,Rajasthan,WestBengal6.Sedex:Globalcollaborativeplatformforsharingresponsiblesourcingdataonsupplychains.ThousandsofcompaniesuseSedextomanagetheirperformancearoundlabourrights,health&safety,theenvironmentandbusinessethics.7.SMART:TheSmartCampaignembodiesa setof coreprinciples for the treatmentof clients - theminimumstandards that clients shouldexpecttoreceivewhendoingbusinesswithafinancialinstitution.9.TierY/Zlocations:Cities/townsclassifiedbytheGovernmentofIndiaassuchforthepurposeofallowancestobepaidtopublicservants.WeuseTierYandZasaproxytoindicatetowns/citiesthataresmaller,havealowercostoflivingandareunservedorunderservedwithrespecttoessentialproductsandserviceswhencomparedtometropolitan(TierX)cities.

DataDisclaimer

Data,unlessspecifiedotherwise,correspondstotheendofthefinancialyear,i.e.March31,2017.WhilewehaveusedourreasonableeffortstoensuretheaccuracyofthedatausedinthisReport,datafromourportfoliocompanieshasnotbeenauditedorindependentlyverifiedbyCaspian.Dataoncertainmetricshasbeenreceivedfrommostbutnotallofourinvesteecompaniesandhenceanyaggregateddatadoesnotnecessarilyincludeallthecompanies intheportfolio. Insomecases,themostrecentlyavailabledatafromacompanyhasbeenincludedandrelatesascloselyaspossibletofinancialyearend2017.DataonjobsinunderlyingSMEenterprisesinourSmallBusinessFinanceportfolioincludesestimatesmadebysomeofourSBFcompaniesandshouldbereadasbeingindicativeofscaleratherthanexactfigures.SectoraldataatanallIndialevelhasbeentakenfromgovernmentdatabasesorotherreliableinternationalorganizationalsources.Incertaincases,thesedatadonotpertaintothecurrentfinancialyearandmaypertaintoimmediatelyprecedingyears.


AcknowledgementsWegratefullyacknowledgethefollowingpublicsourcesforthemacro/sectoraldatainthisreport:

1.TheAgriculturalCensus2010-11:http://agcensus.nic.in/document/agcensus2010/completereport.pdf2.MFINIndia:TheMicroMeterforFY2017:http://mfinindia.org/latest-news/micrometer-issue-21-fy-16-17/

3.Sa-Dhan:TheBharatMicrofinanceReport2016:http://indiamicrofinance.com/wp-content/uploads/2016/09/The-Bharat-Microfinance-Report-2016.pdf

4.TheWorldBank:http://data.worldbank.org/indicator/SP.URB.GROW?locations=INhttp://data.worldbank.org/indicator/SH.XPD.PUBL.ZS

5.TheCensus2011:http://censusindia.gov.in/2011-prov-results/paper2/data_files/india/Rural_Urban_2011.pdf

6.Reportofthetechnicalurbangrouponurbanhousingshortage2012-2017MOHUPA20127.InternationalEnergyAgency:https://www.iea.org/publications/freepublications/publication/IndiaEnergyOutlook_WEO2015.pdf

8.PWC:FundingIndianHealthcare:http://www.pwc.in/assets/pdfs/publications/2017/funding-indian-healthcare-catalysing-the-next-wave-of-growth.pdf

9.IndianChamberofCommerce:SectorBrief-May2015:https://www.indianchamber.org/sectors/healthcare/healthcare-notes-may-2015/

10.KPMG-OPPI:ReportonHealthcareAccessInitiatives:https://home.kpmg.com/in/en/home/insights/2016/08/report-on-healthcare-access-initiatives.html

11.MinistryofMicro,Small&MediumEnterprises:AnnualReport2015-16:http://msme.gov.in/sites/default/files/MEME%20ANNUAL%20REPORT%202015-16%20ENG.pdf

12.NationalHousingBank:http://www.nhb.org.in/List-of-HFCs-Registered-with-NHB-19-02-2016.pdf

PhotoCredits:

Ourportfoliocompanies;Photographer:RahulThomas.Healthcare:Photobyfreestocks.orgonUnsplash.CleanEnergy:PhotobyBielMorroonUnsplash.


CaspianImpactInvestmentAdviser(P)Ltd3rdFloor,8-2-596/5/B/1RoadNo.10,BanjaraHills

Hyderabad,TelanganaState-500034IndiaEmail:[email protected]

www.caspian.in

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