Nuveen is targeting financial inclusion across Latin America with the latest deal from its first private equity impact fund. The $218 million vehicle has invested in GloboKasNet, a digital banking and payments service for low-income and rural communities in Peru.

Nuveen is investing alongside Danish private equity firm Maj Invest’s third financial-inclusion fund, which announced a final close at $183 million in April. Maj had been targeting $200 million for the fund, according to affiliate title Private Equity International’s database. The fund is targeting returns of more than 8 percent IRR, according to a fund document.

“There hasn’t been banking infrastructure in many parts of Peru,” said Radhika Shroff, managing director for impact at Nuveen. “There is a broad market of rural customers in Peru who normally have to travel hours to get to a bank branch, transact and live their lives – if they even have a bank account.” GloboKasNet manages a network of agents – local shops in rural communities across Peru – who are issued with handheld financial transaction devices. “GKN is helping banks reduce the infrastructure they need to access these customers.”

Shroff had previously partnered with Maj to invest in an agent-network banking service in India in a previous role at Accion, a financial inclusion-focused firm where she was deputy chief investment officer between 2012 and 2020. “I personally have known GKN for about a decade [having invested in Latin America at Accion]”, Shroff said to New Private Markets from Peru, where she was attending strategic meetings for GKN after joining the board.

Over its ownership period, Nuveen is aiming to expand GKN’s footprint across Latin America. “There is an opportunity for GKN to expand by being a software-as-a-service company providing its the backend software [which connects agents’ handheld devices to the bank] for banks in other South American markets. There’s a real scale opportunity in SaaS,” said Shroff. “Being in one country in Latin America has macro risks; being in many countries in Latin American helps diversify that risk,” Shroff said.