In what could be termed as a move to revive the sagging investor sentiment towards microfinance institutions (MFIs) in the wake of recent controversies, International Finance Corporation, the multilateral lending arm of World Bank has proposed to invest in Bandhan Financial Services Ltd, claimed to be fourth largest MFI in India. As part of its policy to help out MFIs in higher loan penetration in poorest states, IFC is planning to invest close to $35 million equivalent for a stake in Bandhan.
The MFI operates in 18 states in the northern and eastern parts of India, including some of the poorest states, where population density is high and microfinance penetration is low. Bandhan focuses primarily on providing microloans to women micro-entrepreneurs in rural and urban areas. The firm has about 3 million borrowers and a loan portfolio of about $520 million.
