Microfinance Focus, January 14, 2011: For promoting a more balanced growth of microfinance in India, International Finance Corporation (IFC) may invest equity up to $35 million for a stake in Kolkata based microfinance institution, Bandhan Financial Services, according to IFC’s proposed project list.

Under the proposed project IFC intends to increase access to finance in some of the poorest states in the northern and eastern parts of India and to promoting a more balanced growth of microfinance in India. Most of the MFIs operating in India are concentrated in southern India. Bandhan's operations on the other hand are largely in the northern and eastern part where microfinance penetration is very low and very few MFIs of significant size are located.

Bandhan which is the fourth largest microfinance institution in India operates in 18 Indian states in the northern and eastern parts of the country, including some of the poorest states, where population density is high and microfinance penetration is low. It has about 3.0 million borrowers and a loan portfolio of about US$520 million equivalent.

The major shareholders in Bandhan include, The Small Industries Development Bank of India (SIDBI) with a 10.81% stake and three irrevocable public charitable trusts, including the Financial Inclusion Trust, the North East Financial Inclusion Trust and the Bandhan Employees Welfare Trust , which together hold an about 87% stake.