MICROCAPITAL BRIEF: India's National Bank for Agriculture and Rural Development (NABARD) Looking to Invest in Venture Capital Funds

The National Bank for Agriculture and Rural Development (NABARD) of India, which regulates and promotes microfinance activities in rural areas, recently announced that it is interested in investing in venture capital funds.

According to NABARD’s press release, qualifying venture capital funds must invest at least 50 percent of their portfolio in agricultural and rural activities. In addition, qualifying funds must have operated in India for at least five years or the promoter of the fund must have at least ten years of venture capital experience. The complete list of requirement and preferences is listed at: http://www.nabard.org/pdf/NABARD’s%20policy%20on%20investment%20in%20Venture%20Capital%20Fund%20-%20placing%20in%20website.pdf

According to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, microfinance institutions (MFIs) in India reporting data for 2009 had an aggregate loan portfolio of USD 4.5 billion, total assets of USD 5.1 billion and 26.6 million active borrowers as of the end of 2009.

About Bank for Agriculture and Rural Development (NABARD):

The National Bank for Agriculture and Rural Development (NABARD) is a development bank in India that formulates the credit and banking policy for the rural sector, supervises and conducts on-site inspections of cooperatives and regional rural banks and promotes the development of microfinance activities in the rural sector. NABARD is charged with the oversight of the Microenterprise Development Programme (MEDI), which focuses exclusively on the development of microenterprises. In 2010, NABARD set a fiscal year target of INR 3,750 billion (USD 80.3 billion) for credit disbursement via commercial banks, state cooperative banks, state cooperative agriculture and rural development banks and other eligible financial institutions up from INR 3,250 billion (USD 69.6 billion) the previous year.

Sources and Additional Resources:

[1] NABARD: NABARD’s Venture Capital Fund Investment:

http://www.nabard.org/pdf/NABARD’s%20policy%20on%20investment%20in%20Venture%20Capital%20Fund%20-%20placing%20in%20website.pdf

[2] Microfinance Information Exchange: India:

http://www.mixmarket.org/mfi/country/India

[3] MicroCapital Universe: NABARD:

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=National+Bank+for+Agriculture+and+Rural+Development+(NABARD)

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