Dutch development bank FMO is close to extending a EUR1.2 million ($1.3 million) debt funding to Indian social impact enterprise Gajam India, which operates under the brand name Dharma Life, according to a disclosure.
The proposed debt funding to Gajam India’s holding, Gajam Group, will be converted into a guarantee to back a working capital facility that will be used to purchase and sell primarily solar lamps and energy-efficient cooking stoves, FMO said.
Founded in 2009, Dharma Life focuses on improving the quality of life in rural India through an entrepreneurship model that provides youth with livelihood opportunities and low-income households access to socially impactful products and services. The firm sells solar lamps and induction cooking stoves to rural households.
The enterprise has set up a network of more than 16,000 rural entrepreneurs, called Dharma Life Entrepreneurs, of which 75 per cent are women, reaching more than 40,000 rural villages in 13 states across India, according to the disclosure.
This year, Dharma Life is expanding its entrepreneur network in six additional states to widen its reach to more than 45,000 villages. The firm also aims to create a network of 100,000 Dharma Life Entrepreneurs, out of which 50 per cent will be women, serve 50 million rural low-income consumers, and expand its network globally.
Dharma Life’s partners include Shell Foundation, the UK Government, Johnson & Johnson, IFC, the World Bank, GIC, Facebook, Unilever, Samsung, Coca-Cola, P&G, and several others.
“FMO’s financing will support the growth of Dharma Life and improve living conditions of rural households in India and reduce carbon emissions while supporting the economic empowerment of 16,000 small entrepreneurs,” the Dutch lender said.
The loan will be taken from FMO’s Access to Energy Fund, which supports energy generation, transmission, and distribution projects in developing countries. The fund focuses on sustainable energy solutions, which is a focus area for FMO as a whole.
India is FMO’s biggest investment destination and the Dutch development bank expects its investment in the country to touch EUR1 billion ($1.1 billion) in the next four years, according to a senior executive.