MICROCAPITAL BRIEF: Indian Microfinance Institution Utkarsh Raises $5m in Equity from Norwegian Microfinance Initiative, Aavishkaar Goodwell, International Financial Corporation

Utkarsh Micro Finance Private Limited (Utkarsh), an Indian microfinance institution (MFI), has raised equity commitments of INR 15.8 crores (USD 3.2 million) from Norwegian Microfinance Initiative (NMI) Frontier Fund, a public-private partnership (PPP) that provides technical and financial support to “emerging” microfinance institutions; INR 6 crores (USD 1.2 million) from Aavishkaar Goodwell India Microfinance Development Company (AG), an Indo-Dutch for-profit private investor in Indian MFIs; and INR 3.2 crores (USD 650,000) from International Finance Corporation, the private-sector investment arm of the World Bank Group [1]. AG and IFC are previous investors in Utkarsh.
As of March 2011, Utkarsh reports having 52 branches, 55,500 active borrowers and a loan portfolio of INR 41 crores (USD 8.3 million). As of September 2011, Utkarsh does not report data to the US-based nonprofit Microfinance Information Exchange (MIX).
By Nisha Koul, Research Associate
About Utkarsh Micro Finance Private Limited (Utkarsh): Utkarsh Micro Finance Private Limited is a microfinance institution (MFI) based in Varanasi, India. It aims to provide access to credit in the northern Indian states of Uttar Pradesh, Madhya Pradesh and Bihar. As of March 2011, Utkarsh reports having 52 branches, 55,500 active borrowers and a loan portfolio of INR 41 crores (USD 8.3 million). As of September 2011, Utkarsh does not report data to  the US-based nonprofit Microfinance Information Exchange (MIX).
About Norwegian Microfinance Initiative (NMI): The Norwegian Microfinance Initiative (NMI) is a partnership between the Norwegian public and private sectors that invests in and provides technical support for microfinance institutions (MFIs) in developing countries. The mission of NMI is “to contribute to the empowerment of poor people and to the creation of jobs, wealth, and economic and social sustainability in developing countries by investing in and supporting MFIs.” NMI makes its investments through two investment funds: NMI Global Fund, which supports the expansion of MFIs that already have large and sustainable operations, and NMI Frontier Fund, which supports emerging MFIs in Sub-Saharan Africa and South Asia. NMI’s website claims that its investors have committed NOK 600 million (equivalent to USD 100 million) to the NMI Global Fund and the NMI Frontier Fund as of October 2010.
About Aavishkaar Goodwell India Microfinance Development Company: Aavishkaar Goodwell is an Indian-Dutch joint venture that is looking to build a portfolio of USD 25 million in 30 to 40 microfinance start-ups and 8 to 10 growing microfinance institutions (MFIs). The investment team in India works alongside the group that manages Aavishkaar India Micro Venture Capital Fund. The Dutch microfinance private equity company Goodwell Microfinance Development Company is the leading investor in Aavishkaar Goodwell, along with development finance institutions and commercial banks including the Netherlands Development Finance Company (FMO in Dutch), the World Bank’s International Finance Corporation (IFC) and Germany’s Deutsche Bank.
About International Finance Corporation: A member of the World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries that drive its policies and approve disbursements. As of June 30, 2010, IFC reports net income of USD 1.75 billion, total assets of USD 61 billion, return on assets of 3.1 percent and total investment mobilization of USD 18.4 billion to 528 projects.
Sources and Additional Resources:
[1] Norwegian Microfinance Initiative, Press Release, “NMI leads USD 5.5 million equity round to support financial inclusion in India,” http://www.nmimicro.no/index.php?section=6&news=2011-09-26_NMI%20leads%20USD%205.5%20million%20Equity%20Round
ICRA, Report, http://utkarshmfi.com/pdf/ICRARating2011.pdf
MicroCapital.org story, May 24, 2011, “MICROCAPITAL BRIEF: Norwegian Microfinance Initiative (NMI) Global Fund Invests $2.8m in Triodos Microfinance Fund (TMF),” http://www.microcapital.org/microcapital-brief-norwegian-microfinance-initiative-nmi-global-fund-invests-2-8m-in-triodos-microfinance-fund-tmf/
MicroCapital.org story, September 25, 2011, “MICROCAPITAL BRIEF: IFMR Capital Securitizes $15m in Microloans Originated by Indian Microfinance Institutions (MFIs) Asirvad, Disha, Grameen Koota, Mimoza, Satin Creditcare, Suryoday, SV Creditline, Utkarsh,” http://www.microcapital.org/microcapital-brief-ifmr-capital-securitizes-15m-in-microloans-originated-by-indian-microfinance-institutions-mfis-asirvad-disha-grameen-koota-mimoza-satin-creditcare-suryoday-sv-creditline/,” http://www.microcapital.org/microcapital-brief-ifmr-capital-securitizes-15m-in-microloans-originated-by-indian-microfinance-institutions-mfis-asirvad-disha-grameen-koota-mimoza-satin-creditcare-suryoday-sv-creditline/
MicroCapital Universe Profile: Utkarsh Micro Finance Private Limited (Utkarsh), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Utkarsh+Micro+Finance+Private+Limited
MicroCapital Universe Profile: Norwegian Microfinance Initiative (NMI), http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Norwegian+Microfinance+Initiative+%28NMI%29
MicroCapital Universe Profile: Aavishkaar Goodwell India Microfinance Development Company, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Aavishkaar+Goodwell+India+Microfinance+Development+Company+Ltd
MicroCapital Universe Profile: International Finance Corporation, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29
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