IFC, a member of the World Bank Group, is partnering with global microfinance player ACCION to provide advisory support to Swadhaar FinServe to expand its operations in India and enhance access to financial services for women living in city slums.
Swadhaar FinServe, a non-banking financial company working exclusively in Indian urban microfinance, will expand its services to the states of Gujarat, Madhya Pradesh, Maharashtra, and Rajasthan. While the potential is significant, few microfinance models in India address the challenges of serving the urban poor.
IFC and ACCION will help Swadhaar design, pilot and launch new products and modify financial services delivery by aiding in risk management. IFC will pay about a third of the project’s $1.1 million budget, while ACCION and Swadhaar together will contribute the remaining two-thirds.
The project will help Swadhaar adopt responsible finance programs that follow client-protection principles. IFC and ACCION will work over three years to help Swadhaar scale up, redesign systems and assist in product development to expand its outreach. ACCION recently provided an additional $1.6 million capital to help Swadhaar navigate the challenging environment in microfinance in India.
“We work with the urban poor and micro entrepreneurs, a section largely ignored by mainstream microfinance. With the support of IFC and ACCION, we expect to expand into underserved geographies and client segments where the need for microcredit is the highest,” said Veena Mankar, Managing Director, Swadhaar.
An estimated 81 million people live in slums in Indian cities, most of them earning their living through the informal sector. These families have limited access to financial services. Greater Mumbai alone has a population of 12 million, of which 54 percent live in urban slums or informal housing.