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Indian microfinance sector continues to attract funding. Aavishkar Goodwell, a for-profit private equity organisation that funds microfinance institutions (MFIs) in India, has received an undisclosed amount of funding from World Bank's private equity arm International Finance Corp, the Netherlands Development Finance Company (FMO), and Deutsche Bank.

The investment will be used to bankroll up to 60 greenfield microfinance organisations and also for funding up to 10 existing MFIs in India, a release said. Aavishkar Goodwell had recently invested $2 million (along with Legatum Capital who put in $25 million) in Hyderabad-based MFI Share Microfin.

What attracts investments into microfinance sector? Apparently there is a potential client base of 75 million households. And this will require a large number of MFIs to penetrate into the segment. Aavishkar plans to launch new microfinance organisations through a franchising programme, IntelleCash. It's currently in the process of building up a $25 million portfolio across India, and half of it will be invested in microfinance start-ups as an equity partner. Aavishkar plans to reach 10 million clients by 2011. Aavishkar already has partners like ICICI Bank, Cashpor, an MFI in North India, and the development finance advisory company Intellecap in its franchsing programme.

Aavishkaar Goodwell is an Indo-Dutch initiative between Aavishkaar India Micro Venture Capital Fund and Goodwell Microfinance Development Company of the Netherlands.

Recent Investments In Microfinance Sector

JM Financial Fund, Lok Capital Invest $12.5 Million In Spandana

Share Microfin Gets $27 Million Investment From Legatum Capital, Aavishkar Goodwell

Sequoia Capital Invests $11.5 Million In SKS Microfinance; IPO In 3-5 Years

ICICI Bank To Invest In Three Microfinance Funds