New Delhi, India, April 8, 2013
—IFC, a member of the World Bank Group, is investing over $700,000 through a rights issue in microfinance institution Utkarsh to support its planned expansion in the low-income states of Uttar Pradesh and Bihar.
IFC’s total equity investment in Utkarsh stands just short of $2 million after this round of funding. Other existing investors of Utkarsh, Aavishkaar Fund II and Norwegian Microfinance Initiative, are investing $1.7 million and $1.23 million along with IFC. Over the next six years, Utkarsh expects to increase its reach five-fold to over 800,000 women borrowers in rural and semi-urban markets.
“This additional capital will increase access to finance in the country’s two most populous states,” said Govind Singh, Managing Director and CEO, Utkarsh Micro Finance. “With IFC’s support, we expect to grow our operations significantly in regions where the need for microfinance products is greatest.”
India’s microfinance market is potentially the largest but among the least-served market in the world. It is estimated that around 80 percent of India's population has no or limited access to financial services, particularly in the low-income states. The sector has been able to meet only 10 percent of the existing demand for financial products among the low-income segments.
“IFC’s investments in microfinance sector will help reach women customers in un-served and under-served markets,” said Thomas Davenport, IFC Director for South Asia. “The investment is in line with our strategy of promoting greater financial inclusion.”
IFC made its first investment in Utkarsh in March 2010. IFC is also offering advisory services to Utkarsh, helping it diversify its products, develop sound internal systems, and introduce a system of social audit. Based in Varanasi, Utkarsh has expanded its presence to 26 districts across five states in the last four years. Despite the challenges faced by the Indian microfinance sector, Utkarsh has grown its loan portfolio to $32.5
million and attracted investments totaling to $10.7 million
from various investors since launching operations in September 2009.
About IFC
IFC, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, mobilizing capital in international financial markets, and providing advisory services to businesses and governments. In FY12, our investments reached an all-time high of more than $20 billion, leveraging the power of the private sector to create jobs, spark innovation, and tackle the world’s most pressing development challenges. For more information, visit
www.ifc.org
.
Stay Connected
