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| Asomi Finance Private Limited |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 27558 |
| Company name | Asomi Finance Private Limited |
| Country | India |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Pend PDS-IR |
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| Date SPI disclosed | August 27, 2008 |
| Projected board date | September 29, 2008 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The proposed project involves an equity investment by IFC in Asomi Finance Private Limited (Asomi), a MFI that undertakes microfinance, income generation and developmental activities in Assam, an underdeveloped state in the northeastern region of India. The geographic region served by Asomi is amongst the poorest in India and is also largely unserved by formal financial institutions. Asomi had an active client base of about 21,000 and an outstanding portfolio of Rs. 172 million ($4.30 mln). Asomi also focuses on activities beyond just microfinance and undertakes many livelihood projects (e.g., dairy development) in the region. |
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| Project sponsor and major shareholders of project company |
| Asomi was set up by Mr. Subhra Jyoti Bharali, who has almost ten years of experience in working in the development sector. Subhra is a young and dynamic social entrepreneur. Mr. Bharali has acquired a new NBFC. Currently, the portfolio is in a society and is planned to be transferred to the new NBFC over the next few weeks. The sponsor, Mr. Bharali, will own a majority stake in the NBFC. Other major shareholders are likely to be IFC and Aavishkar Goodwell Microfinance Development India Ltd, a microfinance focused IFC investee fund. |
| Total project cost and amount and nature of IFC's investment |
| The project proposes an investment for IFC’s own account in the form of equity and compulsorily convertible preference shares of for up to 20% equity stake in Asomi. |
| Location of project and description of site |
| Asomi is headquartered in Guwahati, the state capital of Assam, a state in north east India. It plans to expand into other states in the North Eastern region including Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. |
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| Anticipated development impact of the project |
Through this proposed investment, IFC will help to:
- expand the reach of financial services to about 400,000 client over the next 5 years in one of the poorest and conflict affected regions in north east India; and
- provide livelihood generation opportunities in the region. Asomi aims to penetrate deep into the most remote areas serving the most neglected communities in Assam.
It is currently working in 16 districts of Assam and plans to cover all 22 districts of Assam within the next three years. Asomi will look to also broaden its geographic outreach to other states of the Northeast: Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland and Tripura. |
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| IFC's expected development contribution |
- Absence of private capital:
There is little interest from private commercial investors in the north eastern region due to the difficult terrain, poor status and conflict issues in the region. IFC’s support, therefore, become critical for an institution like Asomi to grow in a highly underserved region like the north east.
- Demonstration effect:
IFC’s support to a MFI in the North Eastern region of India will have a significant demonstration effect and may help in attracting private capital to the region.
- Capacity Building Support:
IFC’s tailor made advisory services will provide institutional building support and help in transforming it to a long term self sustaining entity. It may also encourage other entrepreneurs to set up similar ventures. |
| Environmental and social issues - Category FI |
This project involves IFC support for the business of microfinance and has been classified as a Category FI project according to IFC’s Environmental and Social Review Procedure. Asomi will be required to:
- develop a procedure relevant to its business process, prior to disbursement, that is satisfactory to IFC, and that ensures that all its investments are screened and processed to avoid supporting activities on the IFC Microfinance exclusion list;
- identify qualified persons to manage and implement the procedure;
- demonstrate commitment and resources to implementing the procedure;
- submit a periodic report to IFC as per a format to be provided by IFC. |
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| For inquiries about the project, contact: |
Mr. Subhra Jyoti Bharali, Chief Executive Officer
Asomi Finance Private Limited
2nd floor, Bharalumukh
Guwahati, Assam 781009
India
Telephone: +91-94351 43069
Fax: +91-361-2736213
Website: www.asomi.co.in |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
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