IFC invests $1.15 million in Belstar microfinance

Microfinance Focus, Nov. 12, 2009: World Bank investment arm IFC has decided to invest $1.15 million in Belstar Investment and Finance Limited, Hand in Hand’s microfinance arm, to help establish a sustainable microfinance operation and reach a million women in the next five years. Hand in Hand is an NGO based in Chennai.

IFC Executive Vice President and CEO Lars Thunell signed an agreement with Belstar in Kaancheepuram district of Tamil Nadu to provide equity of up to $1.15 million to support the initiative. IFC’s equity funding will enable Belstar to obtain further support from international investors, domestic banks and financial institutions, said a statement.

Belstar’s product offerings will focus on low-income households that are unable to access such services from commercial banks. Apart from microfinance, Hand in Hand provides training and advisory support to its women members engaged in micro-enterprises and helps them build linkages with corporations to make their operations sustainable.

Percy Barnevik, Chairperson of Hand in Hand International, said, “In its efforts to strengthen and scale up its operations, Hand in Hand seeks to work with experienced partners that can provide technical and financial support. IFC is one such key partner for us.”

In addition to the funding, IFC Advisory Services will help Belstar put in place risk management and internal control systems while improving staff training, broadening the company’s product range and building a sustainable microfinance institution.

“IFC’s participation and support in this transformation will be crucial to our sustainability and ability to attract other domestic and international investors,” said Kalpana Sankar, Belstar’s Managing Director.

IFC’s global microfinance portfolio as of June 30, 2009 is $1.2 billion, invested in over 140 microfinance institutions in 60 countries.

IFC Executive Vice President and CEO Lars Thunell, said: “Supporting microfinance institutions is an important step toward creating economic opportunities for the poor. Through our work with Belstar, we will bring financial services to underserved people in India, particularly women entrepreneurs in rural areas.”

Bangalore-based Belstar is a non-banking finance company with a presence in Karnataka, Puducherry and Madhya Pradesh.

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