The International Finance Corporation (IFC), the Netherlands Development Finance Company and Deutsche Bank have announced a joint investment in the microfinance private equity company Aavishkaar Goodwell. The investment will support the launch of up to 60 greenfield microfinance organizations and the expansion of up to 10 fast-growing microfinance institutions across India. The potential client base for microfinance in India is estimated at around 75 million households. Asad Mahmood, Managing Director of Deutsche Bank Global Social Investment Funds said, ?Investing in Aavishkaar Goodwell gives us exposure to the microfinance equity market in India, which is growing very rapidly. With their on-the-ground presence and track record, the company will apply a solid private equity approach in a mission-driven setting, building a balanced portfolio of smart capital investments.?
Aavishkaar Goodwell will provide equity capital and hands-on support to fast-growing microfinance organizations. The company is building up a $25 million portfolio across India. Its investments include $2 million in Share Microfin Ltd which plans to expand from more than a million clients today to 6 million by 2012.
Aavishkaar Goodwell expects to invest about half of its portfolio in microfinance start-ups, as an equity partner in the innovative microfinance franchise initiative, IntelleCash. This initiative aims to reach 10 million clients by 2011. Partners in this program include ICICI Bank, the north Indian microfinance organization Cashpor, and the development finance advisory company Intellecap.
