November 24, 2010 -- IFC's work with a public sector bank in India, Central Bank of India, to create growth opportunities for small and rural enterprises in India's economically stressed states is one of many initiatives launched as part of its inclusive growth agenda.
This partnership will help identify promising sectors for investment promotion, review investment policies, and assist the states of Uttar Pradesh, Madhya Pradesh, Bihar, Rajasthan, Chattisgarh, Jharkhand, Orissa, and Northeast India in implementing reforms for improved business and economic growth.
Creating Opportunities Where It Matters
Over the last one and a half years, IFC’s impetus in low-income and rural parts of India is helping grow opportunities for the underserved. Local non-banking finance company Au Financiers which serves low-income, self-employed, first-venture, and small transport entrepreneurs in semi-urban and rural Rajasthan and other Indian states is one such example.
IFC-funded Au Financiers is building scale to increase lending and meet the needs of those who find it challenging to access credit for business activities. The company is expanding its loans against property and small-ticket business loans for micro and small enterprises.
Manohar Singh Rajawat from Dausa district of Rajasthan, who struggled to earn his living as a tent house laborer in 2007, today runs his own tent house and owns five trucks financed by Au Financiers. The company expects to reach 180,000 similar small borrowers in five years.
IFC South Asia Director Tom Davenport, said, “Au Financiers is truly an inspirational institution under an enthusiastic leadership that is delivering excellent financial and developmental results.”
Housing for the Poor
Another unique partnership between IFC, India’s National Housing Bank, and the Rajasthan state government has helped establish a new housing finance company in the state to provide affordable home loans to low-income households that have limited or no access to formal financial services.
IFC VP Rashad Kaldany, on his recent visit to India, said, “Such financial-inclusion type interventions are precisely where we need to be bold, both on financing as well as on the supply side.”
Indian Minister of State for Finance Namo Narain Meena commended the initiative “as a model for other Indian states to emulate that will provide safe, secure, affordable housing and a better quality of life for the poor.”
During his trip, Kaldany had visited FINO, a biometric smart card service provider and an IFC investment and advisory client that has made banking services available to 20 million unbanked Indian households. Kaldany referred to the experience as “truly special.” FINO is one of the 12 IFC clients awarded for promoting inclusive business models at the base of the pyramid.