International Finance Corporation (IFC), a member of the World Bank Group, has agreed to provide equity of USD 1.15 million to Hand in Hand’s microfinance arm, Belstar Investment and Finance Limited. Hand in Hand is an NGO that is involved in efforts such as reducing child labor and malnutrition and improving solid waste management. The financing is intended to enable Belstar to obtain support from other investors and IFC Advisory Services will help Belstar improve risk management, staff training and product range.
Additional Resources
International Finance Corporation (IFC)
http://www.ifc.org
Hand in Hand International
http://www.hihseed.org
Source press release (available at http://www.ifc.org/ifcext/media.nsf/content/SelectedPressRelease?OpenDocument&UNID=FA3181AB4BD5F7728525766C0057E5D6):
IFC, a member of the World Bank Group, will work with the microfinance arm of Hand in Hand to help establish a sustainable microfinance operation for India’s poor in rural and semi-urban areas and reach as many as a million women in the next five years.
IFC Executive Vice President and CEO Lars Thunell signed an agreement to provide equity of up to $1.15 million to Hand in Hand’s microfinance arm, Belstar Investment and Finance Ltd. Hand in Hand is a nongovernmental organization engaged in reducing poverty by creating enterprises and jobs. The financing will enable Belstar to obtain support from international investors, domestic banks, and financial institutions.
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 in India and helps them build linkages with larger corporations to make their operations more 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.”
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.”
In addition to the funding that IFC is providing, IFC Advisory Services will help Belstar put in place risk management and internal control systems while also 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.
Since the early 1990s, IFC has been instrumental in the rapid growth of microfinance around the world by providing advisory services and direct and indirect investment services. IFC’s global microfinance portfolio as of June 30, 2009 is $1.2 billion, invested in over 140 microfinance institutions in 60 countries.
IFC is the only international financial institution focused exclusively on the private sector, the engine of sustainable development in emerging markets. Along with IBRD, it is currently seeking a capital increase to strengthen its ability to create opportunity for the poor in developing countries—including by supporting microfinance institutions benefiting small women entrepreneurs in India.
To learn more about IFC’s activities in South Asia, visit www.ifc.org/southasia.
About IFC
IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit www.ifc.org.
About Hand in Hand International
Hand in Hand International is a registered charity supported by Dutch, Swedish, Indian governments and other donors. It is a non-governmental organization with a successful enterprise creation program in many countries including India, South Africa, Afghanistan and Brazil, under which they provide managerial support and assistance to pilot projects. Sven Sandstrom, ex-managing director of IBRD, is a Director with Hand in Hand International and has been closely involved in the transformation of the microfinance operations of the Indian entity. For more details, visit www.hihseed.org.
About Belstar
Headquartered in Bangalore, Belstar is a non-bank finance company, registered with Reserve Bank of India. Led by S. S. Swaminathan, CEO, it is the microfinance delivery arm of Hand in Hand, an Indian nongovernmental organization based largely in Tamil Nadu state, with a presence in the states of Karnataka, Pondicherry and Madhya Pradesh. Hand in Hand‘s development agenda includes elimination of child labor; tackling malnutrition; programs on solid waste management, organic farming and watershed management; village enterprise centers; and Self-Help Groups for women. Belstar will provide microfinance lending to these Self-Help Groups.
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