Hyderabad: Varanasi-based Utkarsh Micro Finance Pvt. Ltd on Monday said it has raised Rs.20 crore from its existing investors Aavishkaar Goodwell India Microfinance Development Co. Ltd, International Finance Corporation (IFC) and Norwegian Microfinance Initiative.
The microlender said it will deploy the money to strengthen its presence in Uttar Pradesh, Bihar, Uttarakhand and Madhya Pradesh.
Utkarsh, a non-banking finance company, operates 102 branches in 24 districts of the four states and Delhi. It had more than 197,500 active clients and a loan portfolio of Rs.178 crore as on 31 March.
Post the equity infusion, the company’s net worth is Rs.65 crore. The company raised Rs.6.6 crore and Rs.25 crore in two previous rounds of funding over the past three years.
The latest investment “has come at the appropriate time when we see a lot of positive development in the sector, with more regulatory clarity and better availability of debt funding from the banks and financial institutions, said Govind Singh, managing director and chief executive of Utkarsh.
The funding will also help it offer micro enterprise loans, insurance and pension, said Abhisheka Kumar, chief financial officer.
“Our follow-on investment in the company underscores our faith in Govind and his team to further scale and consolidate Utkarsh’s position in the underserved Northern belt of the country,” said Ajay Maniar, principal, Aavishkaar.
“IFC’s investments in microfinance sector will help reach women customers in unserved and underserved markets,” said Thomas Davenport, IFC director for South Asia. “The investment is in line with our strategy of promoting greater financial inclusion,” Davenport said.
India’s microfinance industry is trying to recover from a crisis set off by the passage of a 2010 law in Andhra Pradesh that tightened lending norms for MFIs, preventing them from giving a second loan to an existing borrower without government approval and barring them from visiting a customer’s premises.
Last week, New Delhi-based microlender Satin Creditcare Network Ltd raised Rs.41 crore from MicroVest II Lp, ShoreCap ll Ltd and Danish Microfinance Partners K/S, allowing existing investor Lok Capital to sell its stake in the company.