IFC, a member of the World Bank Group, has made an equity investment of $22 million ( Rs 120 Crore approximately) in Ratnakar Bank to support financial inclusion and increase financing to agri-based businesses and micro, small and medium enterprises.
The Kolhapur-based bank has strong presence in semi-urban and rural markets of Maharashtra, Karnataka and Goa. In the last three years, the bank has expanded its network. Currently, it has 125 branches and 184 automated teller machines spread across 11 states in India. The bank has tripled its balance sheet over the last few years with assets growing by 123 percent in financial year 2012 compared to 2011. As of March 31, 2013, the bank’s assets are about $ 2.4 billion.
The bank expects to significantly enhance its reach among small businesses and micro-borrowers. In the coming years, a majority of them will be women. A sizable proportion of these borrowers are likely to be from low income states of Rajasthan, Madhya Pradesh and Chhattisgarh.
“IFC’s support will help us adopt best practices in risk management, and develop tailored products, sales and delivery channels to strengthen our services for micro, small and medium enterprises,” said Vishwavir Ahuja, Managing Director, & CEO, Ratnakar Bank.
IFC’s engagement with Ratnakar Bank will also facilitate the development of a social and environment management system for growing the business in a sustainable manner. The development of such a system will help ensure that environmental and social risks are well managed.