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Chennai MFI Belstar To Raise $900,000 From Norwegian Fund

12 May, 2010

Belstar Investment and Finance Pvt Ltd, a Chennai-based microfinance institution (MFI), is raising $900,000 (around Rs 4 crore) from NMI Frontier Fund, a Norwegian fund investing in emerging economies. NMI is investing alongside three other funds that include International Finance Corporation (IFC), Swedish Development Finance Institution and Aavishkaar Goodwell, said a company statement.

However, the investment amount of other funds, and the quantum of stake the funds will be picking in Belstar were not disclosed. A previous VCCircle report suggests IFC’s investment in Belstar would be around $1.5 million (around Rs 6.7 crore).

With this investment, NMI will also get board representation in Belstar. NMI is a strategic partnership between the Norwegian public and private sectors, and invests in MFIs in developing countries. 

Belstar is a non-bank financial company (NBFC), and is primarily operational in Tamil Nadu and Pondicherry. It plans to focus on providing loans to low-income households that are unable to access such services from commercial banks, the statement added.

Richard Weingarten, managing director, NMI, said, in the statement, “Belstar represents the first direct investment of the NMI Frontier Fund. This is an important milestone for NMI. The fund will help Belstar in providing new funding to over 28,000 self-help groups (SHGs).” NMI manages around $100 million across two funds, NMI Global Fund and NMI Frontier Fund. 

Belstar is an affiliate of HIH, a non-governmental organization (NGO) focused on livelihood promotion. Dr Kalpana Sankar, who is the managing trustee of HIH, is one of the major shareholders of Belstar. Other main shareholders of the firm include Sarvam Mutual Benefit Trust and KPM Private Mutual Benefit Trust. It currently has over 64 branches, 45 in Tamil Nadu, 10 in Karnataka and 9 in Pondicherry, and has over 75,466 active borrowers.


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Chennai MFI Belstar To Raise $900,000 From Norwegian Fund

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