British International Investment

Ergos Business Solutions Private Limited

South AsiaFood & Agriculture

Ergos Business Solutions is an integrated supply chain business operating through a network of micro warehouses in rural Bihar in India. It aims to enable market linkages to small farmers in a scalable and cost-effective manner.

This investment was made when British International Investment was named CDC Group.

Our investment

Description of the investment.

We invested in the business as a co-investment alongside the Aavishkaar Bharat Fund, a 2018-vintage fund investing in high impact sectors in India, such as agriculture, financial services, healthcare, waste and sanitation, renewable energy and logistics. CDC committed $25 million into the fund in late 2017.

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

Increase incomes for smallholder farmers through market access and enhanced financial inclusion (SDG 2.3).

How?

How?

Providing farmers with access to warehousing facilities to store grains post-harvest, which allows them to minimise grain wastage and maximise the price of produce by deferring sales to the off-season. They are also able to access credit facilities collateralised against stored grains and gain market access to sell grains.

Who?

Stakeholder Geography Characteristics
Customers (farmers)

Bihar, India

Smallholder farmers cultivating less than two hectares of land. Indian smallholder farmers have average earnings of $3 - 4 per day.

How much?

Scale Depth/Duration

Expected to reach 112,000 farmers by 2025.

Average increase in earnings of around 25 – 30 per cent per farmer.

Contribution/additionality

Contribution/additionality
  • Financial additionality: The commercial market does not offer capital in sufficient quantities to meet the company's plans or needs.
  • Value additionality: We are supporting improvements in environmental, social, governance and business integrity management systems and processes.

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

This investment is made under an approved Catalyst Strategy, and therefore does not require a grid score.

Risk

Execution Risk
  • the impact case relies on the business’ successful scale-up.
Unexpected Impact Risk
  • Customers at risk due to loans against commodity stock.

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 [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    June 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D4459
    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.

    :
    Food & Agriculture

    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 :
    Equity
    Start date :
    December 2020
    Amount :
    $3.04m
    Currency of investment :
    INR
    Domicile

    The company or investment fund’s place of incorporation.

    :
    India

Subscribe to receive our latest news and updates