IFC, a member of the World Bank Group, in a release stated that it 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 had first in
IFC, a member of the World Bank Group, in a release stated that it 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 had first invested in Utkarsh in March 2010.
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 in the release. “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, the release added.
“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 is also offering advisory services to Utkarsh, helping it diversify its products, develop sound internal systems, and introduce a system of social audit.