IFC proposes $20m investment in Indian MFI

IFC’s commitment will come in the form of a senior debt investment, according to a disclosure, and will be used to expand RGVN’s presence in its core territories of northeast India and add to its portfolio of loan products. The region has some of the country’s lowest rates of financial inclusion and IFC believes RGVN will be vital in reaching its unbanked population.

RGVN originated in 1995 as RGVN Credit and Savings Programme, backed by the Small Industries Development Bank of India (SIDBI), before incorporating as RGVN Microfinance in 2008. SIDBI continues to hold an 8.4% stake, but the company is backed by other investors including early-stage VC firm Pi Ventures and Dia Vikas Capital, an Indian social investment fund wholly owned by non-profit organization Opportunity International Australia.

Along with several other MFIs and non-banking finance companies (NBFCs), RGVN received in-principle approval for a small finance bank (SFB) license from the Reserve Bank of India in 2015. The license allows institutions to perform basic banking services such as acceptance of deposits and lending in order to help their mostly rural and low-income customers enter the formal banking system.

Most of the SFB license recipients have received support from IFC, including Equitas Holdings, Ujjivan Financial Services, Janalakshmi Financial Services, Au Financiers, and Suryoday Micro Finance. The license has spurred on a number of financial sector IPOs, as institutions seek to bring their capital reserves and foreign investor holdings in line with SBI requirements. Au Financiers was the first institution to meet the new standards, receiving final approval for its SFB license from RBI last year.

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Financials
• Expansion
• India
• IFC
• Financial Services
• Growth capital