Aavishkaar Goodwell India Microfinance Development Company Ltd, a private equity fund investing in microfinance institutions (MFIs), has invested an undisclosed sum in Shre Pathrakali Finance Co Pvt Ltd (SPFCL). Aavishkaar Goodwell, which has invested along with World Bank's arm International Finance Corporation (IFC), has taken a significant minority stake in the company.
Shre Pathrakali , a Chennai-based MFI, started operations under the brand name Utkarsh in September 2009 with Varanasi district of Uttar Pradesh. It aims to become a significant player serving customers across northern and central India over the next five years, a relatively under penetrated markets for MFIs. Utkarsh has managed to reach out to 3000 clients through seven branches in three months since the launch.
MFI-focused PE funds are increasingly looking at areas where there is a low concentration of such institutions. One of Aavishkaar Goodwell's recent investments include Pune's Suryoday Microfinance. India Financial Inclusion Fund (IFIF), another similar fund, has invested in MFIs like Udaipur’s Sahayata Microfinance and Allahabad’s Sonata Finance. IFC was also recently planning to put Rs 35 crore in Rajasthan's AU Financiers Pvt Ltd.
This is the third investment of Aavishkaar in greenfield MFI operation. The two other deals are Equitas, a Chennai-based MFI and Suryoday Microfinance. Vineet Rai, the managing
partner of Aavishkaar Goodwell, will join the board of directors at Utkarsh. Aavishkaar Goodwell is a joint venture initiative of Aavishkaar India and Goodwell, a Dutch microfinance investment company, with $18 million in commitments.