New Delhi: International Finance Corp (IFC), the private sector lending arm of the World Bank group, plans to inject Rs 1.5 billion into two Indian micro-finance institutions -- Equitas Holdings Ltd and Ujjivan Financial Services Pvt Ltd.
Of the total, IFC plans to infuse Rs 1 billion into Chennai-based Equitas Holdings, the holding company of the Equitas Micro Finance, and Rs 500 million into Bangalore-based Ujjivan Financial Services, the multilateral funding agency said in a statement Saturday.
The micro lenders are expected to use the fund to finance their expansion plans and meet the regulatory capital adequacy requirements over the next three to five years.
Earlier 2011, the Reserve Bank of India had created a new category of non-banking finance company for MFIs -- Non-Banking Financial Company-Micro Finance Institutions (NBFC-MFIs). Under this new category, the RBI had maintained that all NBFC-MFIs will have to maintain a capital adequacy ratio consisting of tier I and tier II capital which should not be less than 15% of its aggregate risk weighted assets.
Besides IFC, Small Industries Development Bank of India, Sequoia Capital, Bellwether Microfinance Fund Pvt Ltd, Avishkaar Goodwell and CLSA Ltd have also invested in Equitas.
Earlier last month, IFC said it will provide $130 million to Inox Renewables Ltd, a subsidiary of Gujarat Fluorochemicals Ltd, to fund development of 400 megawatt (MW) wind power projects in Gujarat and Rajasthan states in India.