Mumbai-based microfinance institution A. Little. World. Pvt Ltd (ALW), has raised $6.5 million (Rs 28.5 crore) in second round of financing. The round was led by funding led by Bellwether Microfinance Fund Pvt. Ltd. and India Financial Inclusion Fund, who were joined by returned backer Legatum Ventures. ALW had raised $2 million from Legatum last year.
ALW plans to use these funds to set up a technology-driven 'Bank-in-a-Box' in every village and facilitate rural India's integration into the mainstream financial sector. The investment will also be used by ALW to improve capacity and build its product portfolio. Last year Enam Financial also picked up a 10% stake in ALW for an undisclosed amount.
ALW uses low-cost technology to integrate micro banking with a multi-bank payment network called ZERO. The ZERO platform converts new generation near field communication (NFC) mobile phones into secure and self-sufficient bank branches. These accounts are based on biometric customer identification and enable a large variety of transactions in villages. Currently this platform has been deployed in live operations by 14 banks. ALW also has a tie-up with State Bank of India (SBI) which would help it expand its rural network. The SBI tie-up also allows access to post offices.
ALW has also partnered with Zero MicroFinance Savings & Support Foundation, a non-profit organization that works with self-help groups and entrepreneurs to establish local "operators" in rural villages and trains them to conduct banking transactions. Zero MicroFinance and ALW together have more than a million customers. ALW plans to reach a customer base of 5 million accounts by the end of fiscal year 2008-09.
Intellecap was the financial advisor to ALW for this transaction.
Leave Your Comment