Microfinance Focus, December 21, 2010: Kerala based microfinance institution Hope Microcredit Finance Ltd. (HMFL) has recently received Series A equity funding of Rs 10 crore (US$ 2.3 million) from Incofin’s Rural Impulse Fund II, a Belgian investment fund.

HMFL, a five year old NBFC (Non-Banking Financial Company) is operational in Kerala & bordering districts of Tamil Nadu and Andaman Islands. As on November 2010, HMFL had a base of 80, 187 clients across of 42 branches with a loan book of Rs 259.4 million (USD 5.8 million).

“At Incofin we continue to develop our investment strategy for India which was founded on very controlled growth and a lot of attention to achieve outstanding levels of corporate governance in our investee MFIs. By partnering with Hope, we take a well considered step. In addition to the well established social value that Hope has developed via various development programs, the parties have agreed to a meticulous implementation of best practices in the area of transparency and client protection. It is our firm belief that this way of doing microfinance business represents the right way to achieve social goals and will at the same time generate fair investment returns”, says Geert Peetermans, Chief Investment Officer of Incofin Investment Management.

Speaking on the significance of the investment in an Indian microfinance institution at this point of time, Aditya Bhandari, Private Equity Expert, Incofin Investment Management, said “The HMFL investment, during this turbulent phase of microfinance, further reinforces our belief in the long-term requirement of Indian microfinance sector. We value the high calibre of HMFL’s management team and their clear strategies to develop and implement social as well as microcredit activities. We will support them in their endeavour to ensure that both social and commercial interests remain focused without any one aspect getting compromised - be it social or commercial.” he added.

Incofin has made four investments across India in the last three years. In June this year Incofin made an equity investment of Rs 4.5 crores (approx USD 952,276) in Fusion Microfinance, a Delhi based start-up NBFC-Microfinance.

In October last year Incofin made an equity investment of 100 million INR in Karnataka based Grameen Koota. It also acquired 34% stake in North-East based microfinance institution, Asomi’s capital through its Rural Impulse Fund. It was Incofin’s first investment in Indian microfinance sector.

Commenting on the investment, Raju Kuriachen, CEO of HMFL said, “Incofin investment not only brings the equity to the organization but also comes with global expertise, confidence and motivation for all of us during this turbulent period. We are proud to partner with Incofin towards making our vision to empower the society with sustainable livelihood through financial inclusion, a possible one. This partnership will empower HMFL to reach many more quality heights in the future.”