Varanasi-based Utkarsh Micro Finance Pvt Ltd has raised $21 million (Rs 135 crore) in Series D round of funding, as per a press release. The funding was led by UK's development financial institution Commonwealth Development Corporation (CDC) and local impact investment firm Lok Capital.
Existing investors International Finance Corporation (IFC) and Norwegian Microfinance Initiative (NMI) and Aavishkaar also participated in this round of funding.
The company will use the money to diversify its portfolio of services and products as well as grow in existing geographies while expanding in others.
Founded in 2009 by Govind Singh, Utkarsh Micro Finance focuses on serving the bottom-of-the-pyramid (BOP) customer segment. The company’s customer base is predominantly women focused; the joint liability group loans are specifically designed for the lower-income women.
"Through this infusion of funding, we plan to impact more districts, diversify products and services and enhance our responsible finance initiatives, social interventions and client engagement initiatives," said Govind Singh, MD and CEO of Utkarsh Micro Finance.
“These are progressive times for the financial inclusion space and with the kind of regulatory support MFIs currently have, they have the option to transform into more robust institutional structures. With this in mind, it becomes important for us to fund institutions that have the vision and capacity to be able to leverage the current environment and we believe Utkarsh is one of them. Govind and team has built a strong institution in a difficult geography with focus on processes and funding relationships," said Vishal Mehta, co-founder and MD, Lok Advisory Services.
Currently Utkarsh Micro Finance has 213 branches. As of November 2014, the firm had a loan portfolio of Rs 552 crore and a customer base of over 4.8 lakh. Apart from providing a suite of financial products, Utkarsh has established a non-for-profit arm, Samutkarsh Welfare Society, to provide vocational and financial awareness training, market linkages, and build health and green energy (solar) initiatives.
“CDC is committed to investing direct equity and debt into the South Asia continent in social ventures, including microfinance and broader financial inclusion. We have been impressed by Utkarsh’s sustained growth and hope this fund infusion will enable the company to grow further," said Maria Largey, investment director, CDC Group.
CDC is one of the investors in social VC fund Lok Capital LLC and Lok Capital II LLC and has been co-investing with Lok for the first time.
Earlier Utkarsh Micro Finance raised funding from Aavishkaar Goodwell India Microfinance Development Co Ltd, IFC and NMI. The funds were deployed for product diversification and to strengthen presence in Uttar Pradesh, Bihar, Uttarakhand and Madhya Pradesh.
(Edited by Joby Puthuparampil Johnson)