Bangalore: Acumen Fund, a nonprofit global venture fund which focuses on addressing poverty across South Asia and Africa has announced that it would collaborate with U.S. Agency for International Development (USAID) thereby facilitating the flow of $15 million in private debt capital to companies and enterprises which provides critical goods and services to the underprivileged across these regions, as mentioned on the company’s official blog.

USAID’s Development Credit Authority will guarantee loans partially made from banks and other financial institution to those approved social enterprises within Acumen’s portfolio. This funding company also plans to leverage its investment expertise to help its investees in securing and sourcing loans that will fall under the terms of this agreement.

This would motivate entrepreneurs through the financial and social returns which in turn would fuel the vital progress in underdeveloped countries in various sectors ranging from education to health. “We are excited by this new way to support enterprise development and look forward to facilitating this additional access to financing alongside USAID, our work has shown us that in order for these local enterprises to be transformational and sustainable, access to different types of capital is essential,” says Raj Kundra, Deputy Chief Investment Officer at Acumen Fund.

“Ultimately these loans will deepen the credit history of these enterprises, helping them secure non-guaranteed loans in the future. Additionally, the guarantee will help to prove the viability of this sector, encouraging local commercial banks and nontraditional lenders to continue investing in social enterprises without donor involvement,” said Ben Hubbard, Director of USAID’s Development Credit Authority.