International Finance Corporation (IFC), the private sector investment arm of the World Bank, is planning to invest up to Rs 40 crore ($7.36 million) in IFMR Rural Channels and Services Pvt Ltd (IRCS) through a quasi-equity instrument for an undisclosed stake.
VCCircle first reported in February that IRCS was eyeing to raise around $5 million.
IRCS will use the money to scale up its lending and non-lending businesses in the current areas of operation and also in other low-income states such as Orissa, Madhya Pradesh and Uttar Pradesh.
It is an investment and distribution company, founded by the IFMR Trust and provides financial products and services in remote rural areas of India through the Kshetriya Gramin Financial Services (KGFS) model.
KGFS is a full-service local financial institution model, providing various types of credit, insurance, savings, pensions, remittance and asset products; focusing on the remote rural households and delivering a suite of financial products through an automated branch-based delivery structure.
It currently provides access to finance to more than 245,000 enrolled customers and has a credit portfolio of approximately $12 million under management. At present, it has operations in Uttarakhand, Orissa and Tamil Nadu.
In March 2012, the company received its first equity funding from Lok Capital and Proparco, who together invested $5 million in IRCS. Proparco is the private sector investment arm of the French development agency AFD and is also one of the key investors in Lok Capital II LLC.
(Edited by Sanghamitra Mandal)
