NMI Frontier Fund today announced an investment of approximately INR 4,00,00,000 (USD 900,000) into Belstar Investment and Finance, a microfinance institution operating principally in the Southern Indian states of Tamil Nadu and Pondicherry.
Belstar is a non-bank financial company that is affiliated with Hand-in-Hand, a large, well-established non-governmental organization (NGO) focused on livelihood promotion. Hand-in-Hand is converting its microfinance activities from NGO to for-profit status and is transferring its microfinance clients and infrastructure to Belstar. Belstar will focus on providing loans to low-income households that are unable to access such services from commercial banks.
“Belstar represents the first direct investment of the NMI Frontier Fund. This is an important milestone for NMI,” said Richard Weingarten, the Managing Director of NMI, “and we are pleased to support Belstar as it provides new funding to the more than 28,000 Self-Help Groups that have been established by Hand-in-Hand. These Groups already have more than 400,000 members, most of whom are poor women in rural India, so we expect that Belstar will be able to scale up its operations rather quickly.”
NMI will have a seat on the Board of Directors of Belstar and will invest alongside the International Finance Corporation (IFC), Swedfund (the Swedish Development Finance Institution), and Aavishkaar Goodwell, a reputable India-focused Microfinance Investment Vehicle.