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| Aavishkaar |
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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 | 25980 |
| Company name | Aavishkaar Goodwell India Microfinance Development Company Ltd |
| Country | India |
| Sector | Finance & Insurance |
| Environmental category | FI |
| Department | Global Financial Markets Group |
| Status | Active |
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| Date SPI disclosed | February 26, 2007 |
| Projected board date | March 29, 2007 |
| Previous Events | Invested: July 6, 2007
Signed: June 25, 2007
Approved: June 13, 2007 |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
| The project involves an investment in Aavishkaar Goodwell India Microfinance Development Co. Ltd (AGI), a fund of up to $25 million which will make investments in microfinance institutions (MFIs) in India. AGI will make investments in start-up and growth phase MFIs operating as non-banking finance companies (NBFCs), service companies or specific financial service providers. AGI will invest in MFIs through common equity, quasi-equity, and other instruments. |
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| Project sponsor and major shareholders of project company |
| AGI has been set up jointly by Aavishkaar Venture Management Services Pvt Ltd (AVMS), a dedicated investment services company established in India, and Goodwell Investments B.V. (GIBV), an investment management and advisory company established in The Netherlands. AVMS has been promoted by Vineet Rai and GIBV by Wim van der Beek. Vineet Rai is a social entrepreneur and has over a decade of experience in small business incubation, SME sector, microfinance and venture capital investments. Wim van der Beek is a financial engineer with two decades of experience in financial structuring, investment funds and cross border direct investments. |
| Total project cost and amount and nature of IFC's investment |
| The proposed IFC investment is an equity investment in AGI of up to $5 million for up to 19% shareholding in the company. |
| Location of project and description of site |
| The project is headquartered in Mumbai and will invest in MFIs across India. The MFIs will have a presence in both rural and urban areas. |
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| Anticipated development impact of the project |
The proposed project is expected to have a high developmental impact in the following areas:
Commercialisation of the microfinance sector: AGI will invest in commercial microfinance operations which have the capacity to scale up over time in a sustainable way.
MFI capacity building: AGI will assist in strengthening the operations and governance of its investee companies.
Significant positive social impact through poverty alleviation: Microfinance helps bring credit to poor people at substantially lower rates than those charged by informal sources, such as money lenders. Furthermore, MFIs typically serve two categories that have traditionally been underserved, women and the rural people. |
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| IFC's expected development contribution |
| The microfinance sector in India has access to debt through the local banks, but often lacks access to equity from experienced microfinance investors. Through this investment, in addition to its equity investment, IFC will bring its experience in the microfinance sector where it has invested more than $400 million in over 100 projects. |
| 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. Considering the nature of activities supported, the project will be required to:
- Commit to establish a procedure in the MFIs in which it will invest and/or co-invest that ensures that their investments are screened and processed to avoid supporting activities on the IFC Microfinance Exclusion List
- Identify qualified persons in these institutions to manage and implement the procedure
- Commit to take action to remedy any gaps in implementation on an ongoing basis
- 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: |
Vineet Rai, Chief Executive Officer
Unit No. 201 & 221, Atlanta Estate,
Nr. Virmani Estate,
Off W.E. Highway, Goregaon (E),
Mumbai 400 063, India
Telephone: +91-22-3253 5292
Fax: +91-22-2877 8255
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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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