NABARD Alternative Investment Fund window

NABARD contributes to professionally managed, SEBI-registered alternative investment funds with exposure to agriculture and the rural sector, under Section 26 of the NABARD Act, 1981. It is often mistaken for a startup route. It is not one: a startup reaches this money only by raising from a fund NABARD has backed.

Who can apply

• The fund must be registered under the SEBI Alternative Investment Fund Regulations, 2012, in Category I or II.
• It must have a life of no more than ten years from first closing.
• The businesses it backs should preferably sit in rural areas as the NABARD Act defines them; if not, what they make or do has to benefit rural areas directly or indirectly.
• NABARD requires twice the amount of its commitment to be invested in enterprises working for agriculture and rural development, with a penalty on any shortfall.
• Earlier funds by the same manager must have finished their commitment period, or deployed most of their corpus.
• First and second funds are treated as new funds and carry extra conditions on outside commitments, key management experience and first closing.

How selection works: Proposals go to an investment committee. A manager has to send the SEBI registration certificate, the private placement memorandum, past performance details certified by a chartered accountant, commitment letters from other investors, and details of investments made and deals in the pipeline. A non-refundable processing fee is payable before the proposal is placed.