Continuing its investment in emerging economies, International Finance Corporation (IFC) is investing an undisclosed sum in Delhi-based Satin Creditcare Network Ltd, a microfinance institution (MFI) operating in north India, VCCircle has learnt.
The investment follows IFC’s recent announcement of $15-million investment in Lok II, a $80-million venture capital fund launched by Lok Foundation, a New York-based not-for-profit corporation for investing primarily in the microfinance space in India, early this month.
The financial terms of the transaction and the quantum of stake that IFC is picking up in Satin could not be ascertained. IFC will take final decision on the investment in its board meeting scheduled to be held on June 21.
Satin, which offers funding to individuals predominantly in urban areas, has recently created a new rural vertical to increase access to finance in rural areas, particularly women, in north India.
It plans to raise equity capital of up to Rs 11.5 crore (about $2.6 million) to support the growth in its rural business model, VCCircle has learnt. The company plans to offer loans to around four million individuals from the corpus.
Satin’s rural business currently operates in the states of Uttar Pradesh (UP), Madhya Pradesh and Rajasthan, with 72 branches, while its urban microfinance clients are spread across Delhi, UP, Punjab, Haryana, Rajasthan and Uttarakhand.
IFC is the private investment arm of the World Bank, and makes both equity and debt funding in socially relevant sectors. Some of its previous deals in the MFI space include AU Financiers Pvt Ltd, Bhartiya Samruddhi Finance, Belstar Investment and Finance and Asomi Finance. Very recently, it announced its plan to invest an undisclosed sum in Craftsman Automation Pvt Ltd, a company engaged in original equipment manufacturing (OEMs) for the automotive sector in Coimbatore.