Indigo will narrow the MSME funding gap by providing debt products that match the cash flow patterns of MSMEs in the ethical textiles and fashion supply chains, while providing market returns to investors. This approach also reduces focus on exit strategies, which are often unrealistic in these markets and industries. Flexible, yet simple, products and repayment mechanisms will reduce risk and deal execution requirements, which will lower transaction costs.
Financing can be used by MSMEs to fund new businesses, facility construction or expansion, working capital, trade credit, or improvements to meet sustainability best practices or adopt clean technologies. Indigo will also provide business advisory services to build profitable, well-run businesses, with positive social and environmental impact.
By becoming the financing nexus for MSMEs in the textile and fashion supply chains, Indigo can de-risk investment by connecting our investment companies with a larger universe of buyers, retailers, and institutions that broadens the network for ethical textiles and fashion. This also allows Indigo to ensure sufficient cash flows for loan repayment through connecting buyers and suppliers throughout the supply chain. Supporting MSMEs in growing businesses will increase the size and influence of the ethical textile industry, creating a sustainable dynamic in the supply chain.
Part of our risk management strategy requires a deep understanding of the nuances of the markets in which we operate in order to make good business decisions on behalf of Indigo investors. Local knowledge, coupled with global investment principals, drives our due diligence process and product characteristics. To ensure this advantage, Indigo will hire top, local, talent who will work full-time, in-country. Our investment teams will be locally based, in order to build relationships with the MSMEs, regulators, market makers and actively participate in the local impact investing community.