IFCs 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 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 countrys two most populous states, Govind Singh, MD and CEO, Utkarsh Micro Finance, said. With IFCs support, we expect to grow our operations significantly in regions where the need for microfinance products is most, he added.
An IFC release said Indias micro-finance market is potentially the largest, but among the least-served markets in the world. It is estimated that around 80% of Indias population has no or limited access to financial services, particularly in the low-income states. The sector has been able to meet only 10% of the existing demand for financial products among the low-income segments.
IFCs investments in micro finance 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 products, develop sound internal systems, and introduce a system of social audit. Utkarsh has expanded its presence to 26 districts across five states in the last four years.