IFMR Rural Channels and Services Pvt Ltd (IRCS) has raised equity funding of Rs 32 crore ($5.2 million) from Tata Capital Special Situations Fund (TCSSF).
TCSSF, which focuses on investing in turnaround opportunities, is the third external equity investor in IRCS. In March 2012, IRCS raised $5 million funding from venture capital firm Lok Capital and Proparco, the private sector investment arm of Agence Française de Développement (AFD).
VCCircle first reported that IRCS is looking to raise $5 million in its second round.
IRCS is in the business of origination and distribution of financial products and services with the goal of complete financial inclusion in remote rural India.
IRCS operates through Kshetriya Gramin Financial Services (KGFS), which focuses on tailoring products to the specific needs of each customer, provides access to financial products and services to customers in remote rural parts of India through its branches.
These products and services include loans, insurance, pensions, savings, remittances and investment products from the company's subsidiaries as well as its business partners.
At present, the KGFS network has more than 185 branches that cater to around 350,000 individuals across Tamil Nadu, Odisha and Uttarakhand, covering around 4,200 remote rural villages.
SG Anil Kumar, CEO, IFMR Rural Channels and Services Pvt Ltd, "We envisage utilising this capital in expanding our operations to newer regions in other parts of the country while growing the existing KGFS to its full capacity."
IRCS, for the purpose of executing the KGFS model, has so far set up Sahastradhara KGFS (Uttarakhand), Dhanei KGFS (Odisha) and Vellaaru KGFS, Thenaaru KGFS, ThenPennaiaaru KGFS and Pudhuaaru KGFS (Tamil Nadu) and plans to set up more KGFSs across other geographies in the future.
TA Ramkumar, head, Tata Capital Special Situations Fund, said, "We believe that the IRCS model, with its emphasis on customer centricity and transparency will help bring customer confidence and build loyalty towards the service provider (IRCS), thereby creating a profitable business, tapping the bottom of the pyramid."
The fund is sponsored by Tata Capital Ltd and its investors include eight large PSU banks.
(Edited by Joby Puthuparampil Johnson)