New Delhi, India, March 19, 2007 —
IFC, the private sector arm of the World Bank Group, is investing up to $ 5 million in Financial Information Network & Operations Limited, a technology service provider offering end-to-end IT solutions that help banks reach underserved rural banking markets in India.
The IFC investment consists of common equity of up to $2.5 million equivalent and convertible preferred shares of up to $2.5 million equivalent. FINO’s target market is the urban and rural poor in India, who have limited financial literacy or poor access to financial services.
An estimated 600 million rural poor in India are either not served or are underserved by the formal financial sector. Insurance, depositary services, remittances and other financial services are either unavailable or inaccessible.
The project is expected to have an important impact on improving microfinance institutions’ financial and operational management systems, efficiency, scale, and financial transparency. It will also support mobile banking solutions that enable rural banks, cooperatives, and microfinance institutions to provide cost effective services in rural India.
Manish Khera, CEO of FINO, said, “Rural outreach is integral to FINO's strategy. With long term financial support from IFC, we will be better equipped to become an independent technology vendor and encourage other banks and microfinance institutions to adopt our technology and reach underserved rural geographies.”
Mrs Farida Khambata, IFC’s Regional Vice President for Asia & Latin America, who was visiting from Washington DC, said, “The projects fits well with IFC’s strategy in India, as it enhances the financial intermediation capacity of microfinance institutions by providing technology solutions that improve their operating efficiency and ability to scale. It also improves rural productivity by extending credit and other financial services into rural India and strengthens the Indian IT sector as a platform for better business services and product development.”
FINO came into existence two years ago to address the need for a more cost effective approach in serving the rural and urban poor in India. The venture was originally funded by ICICI Bank.
IFC in India
In India, IFC’s current held portfolio is $1.3 billion (as of June 2006) making it IFC’s fourth-largest country of operations. Since 1956, IFC has committed financing to projects in India, amounting to $3.3 billion. IFC focuses on supporting the private sector–led development through direct investment and advisory services that promote growth and competitiveness in India. In FY06, IFC committed over $400 million in new investments in India.
Infrastructure is central to IFC's strategy in South Asia. In recent years, IFC has supported manufacturing companies aspiring to global competitiveness. IFC also supports innovation in financial services, including expansion of consumer and housing finance for lower-income groups. IFC provides advisory services and equity finance to microfinance institutions that provide loans to farmers and small nonfarm enterprises in rural areas. IFC is helping companies overcome the limited availability of long-term financing by using its strong credit rating and financial structuring expertise to encourage domestic investors to buy longer-term commercial paper. IFC has also focused on the innovative application of technology by backing IT companies whose products offer potential for important contributions to economic development.
About IFC
IFC, the private sector arm of the World Bank Group, promotes open and competitive markets in developing countries. IFC supports sustainable private sector companies and other partners in generating productive jobs and delivering basic services, so that people have opportunities to escape poverty and improve their lives. Through FY06, IFC Financial Products have committed more than $56 billion in funding for private sector investments and mobilized an additional $25 billion in syndications for 3,531 companies in 140 developing countries. IFC Advisory Services and donor partners have provided more than $1 billion in program support to build small enterprises, to accelerate private participation in infrastructure, to improve the business enabling environment, to increase access to finance, and to strengthen environmental and social sustainability. For more information, please visit
www.ifc.org
.
