NEWS WIRE: India: Belgian Stake in Assam Firm

Source: The Telegraph

Original article available here.

GUWAHATI, INDIA, June, 14 – Assam’s fledgling microfinance sector has receive a boost, with a foreign company picking up a stake in Asomi Finance Private Ltd — an institution which undertakes microfinance, income generation and development activities in the state.

Incofin, a Belgium microfinance company, which operates in 23 countries across the globe, has picked up a 34 per cent stake (Rs 8 crore) recently in Asomi Finance Private Ltd.

The Assam company got its non-banking financial company (NBFC) licence from the Reserve Bank of India on October 30 last year.

This is the first time that the Belgium-based company has invested in the country.

Microfinance is required, as many small entrepreneurs, farmers or artisans in Assam often do not have sufficient collateral or a regular income to qualify for conventional bank loans.

With a small loan, these individuals can start or develop their own business and secure their livelihood.

They thus become more independent and contribute to building a local economy, which, in turn, creates jobs and brings stability.

“The non-banking financial company was formed to raise capital to lend to the rural poor in Assam. We have been operating through ASOMI, a non-governmental organisation, since 2002. But it was very difficult to raise capital to canalise to the rural mass through a non-governmental organisation. Hence, the company was formed to raise capital from the market and provide it to the people who want to engage in income-generating activities to enhance their living standards,” Subhra Jyoti Bharali, the chairman-cum-managing director of the AFPL, told The Telegraph today.

He said the money was required to reach two lakh families in the state.

The company has been able to help 33,000 families through finance, skill upgrades and capacity development and is working in 16 districts at present.

Bharali said the team members of the Belgium company had understood the specific characteristics of their company.

“They were very responsive in providing solutions and distance and cultural differences never seemed to matter. On the contrary, through its international network and outstanding reputation in the field of microfinance, I feel Incofin will bring a big added value.

“The capital injection by the Rural Impulse Fund of Incofin is a first step in the growth strategy of AFPL. In the coming years, further capital will be attracted, both from the existing local partner and from new partners. For Incofin, acting as sole and lead investor, this investment is an important first entry into India. This shows we have an excellent name in the world of microfinance and that we can be very responsive, even in the face of strong competition,” said Loïc De Cannière, the CEO of Incofin, in a statement.

The Belgium company has a capital base of 150 million Euros and is operating in 23 countries over the globe.

Various European banks like Fortis Bank and international fund providers like the International Finance Corporation and World Bank, are the shareholders of the company.

The company has also requested the IFC to take up equity in the company as this will have a significant demonstration effect and may help in attracting private capital to the region.

The idea is to expand to nearly four lakh people over the next five years and provide livelihood generation opportunities in the region.

Bharali said the investment was a big boost to the microfinance sector in Assam. Other institutions like IFC and Blue Orchards (Switzerland), are showing a keen interest to invest in Asomi Finance Pvt Ltd.

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