India: Lok Capital, Dell Foundation Invest $1.5M In Kolkata MFI Arohan
New Delhi, India, August, 13 2008 -
Michael & Susan Dell Foundation (MSDF) and Lok Capital LLC have invested $1.5 million in Arohan Financial Services Ltd, a Kolkata-based microfinance institution (MFI).
Arohan already has commitments of about $500K (Rs 2 crore) from Bellwether Microfinance Fund. Swaminathan Ankleshwar Iyer, author and journalist, is also an investor in Arohan.
Promoted in 2006 by Shubhankar Sengupta, a microfinance professional, Arohan will use the fresh equity infusion for rolling out in other markets of Eastern India. “With this fresh allocation, we want to expand into other areas in Eastern India like Bihar, Jharkhand and also in West Bengal,” Shubhankar Sengupta, CEO of Arohan Financial Services Ltd, told VC Circle.
Arohan also has other expansion plans. Sengupta said he would look at increasing the ticket sizes of their loans and will also be more flexible in the tenure over which they lend out money. Typically, an MFI lends out money on a 50-week basis, they will look at more flexible tenure as well as mode of payments (weekly, quarterly and so on). They will also be open lending money for housing and other capital investments. Their current ticket size is in the range of Rs, 5,000-Rs, 10,000.
This is not first time Michael & Susan Dell Foundation investing in Indian MFI sector. In 2006, the Foundation, along with others like Unitus, had invested in Bangalore-based MFI Ujjivan Financial Services. Delhi-based Lok Capital manages a $22 million fund, and it will invest $500K to $2 million in MFIs.