Grameen Foundation and Grameen Capital India last week announced that they have facilitated US$7 million (Rs. 315 million) in funding for Cashpor Micro Credit through a guarantee pool for socially-focused Indian microfinance institutions (MFIs). The financing from IndusInd Bank and another leading private sector bank in India was backed by US$980,000 in guarantees from Grameen Foundation and arranged by Grameen Capital India.
Microfinance Credit Guarantee
These are the first guarantees to be placed through the US$ 8 million initiative that was launched last December by Grameen Foundation, Grameen Capital India, and Grameen-Jameel Microfinance Ltd. to support organizations exemplifying double-bottom line microfinance in India.
To be eligible for consideration, MFIs must have completed a social-rating or impact-assessment report, using recognized industry guidelines, in the past year. Alternatively, they must be actively using a recognized social-performance measurement tool, such as the Progress out of Poverty Index™.
“Cashpor has a demonstrated commitment to serving India’s poorest people and we are pleased to support it in expanding its services to even more people in Bihar and Uttar Pradesh,” said Alex Counts, president and CEO of Grameen Foundation. “Grameen Foundation is committed to helping the Indian microfinance sector rebound from the recent crisis and we hope these transactions serve as a positive signal to other Indian banks and will help to re-open funding opportunities for socially-focused MFIs.”
The first MFI to provide microloans in Bihar and Uttar Pradesh, the states with the greatest populations living below the poverty line, Cashpor was also one of the first institutions across the broader industry to consistently track its social performance.
Suhail Chander, Head of Corporate and Commercial Banking Group at IndusInd Bank said, “IndusInd Bank has always been judicious in selection of its partner MFIs and is responsive to their need at this critical juncture. This is in alignment with the responsible lending practices of the Bank.”
In announcing the transactions, Royston Braganza, CEO of Grameen Capital India said, “We are pleased to have facilitated the flow of capital to the microfinance sector in these critical times. Recent events underscore the strong need now, more than ever, for stakeholders to support organizations that have set for themselves clear financial and social goals, in reaching out to the poor, and Grameen Capital is pleased to have partnered with Cashpor.”
Grameen Foundation is also deepening its efforts in India through the creation of Grameen Foundation India Private Limited, a social business that will provide technology, human resource management tools and practices, and new business models to poverty-focused social enterprises across the country.