MICROCAPITAL BRIEF: International Finance Corporation (IFC) Proposes $10m Investment in Shree Mahila Self Employed Women’s Association (SEWA) Bank of Gujarat, India, for Microfinance

The International Finance Corporation (IFC), the investment arm of the World Bank Group, a multilateral development finance organization based in Washington DC, has submitted a proposal to its board of directors for an investment of up to USD 10 million in Shree Mahila Self Employed Women’s Association (SEWA) Bank, subject to regulatory approval by the Reserve Bank of India (RBI). The investment will help SEWA Bank expand in terms of both geography and product lines. IFC’s involvement will allow SEWA Bank’s 1.3 million members, which consist of women in rural and unbanked urban communities, to gain access to financial services such as savings, credit, pensions and insurance.

SEWA Bank’s business model will focus on diversified products that include savings and insurance. Additionally, IFC’s banking and advisory team will assist SEWA Bank in the areas of risk management and internal control, product development, asset liability management and management capacity. This project will be IFC’s first investment in an all women’s cooperative bank [1]. As of December 2009, SEWA Bank reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 31.7 million, a gross loan portfolio of USD 10.4 million, return on assets of 0.52 percent and return on equity of 3.06 percent.

By Julie Moksim, Research Associate

About the World Bank Group: The World Bank Group consists of five closely associated institutions, all owned by member countries that carry ultimate decision-making power. Each institution plays a distinct role in the group’s mission to fight poverty and improve living standards for people in the developing world. The World Bank Group encompasses the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). The World Bank was established in 1944 and is headquartered in Washington DC.

About the International Finance Corporation (IFC): A member of the World Bank Group, the International Finance Corporation (IFC) offers loan and debt securities, equity investments, advisory services and technical assistance to alleviate poverty and promote open and competitive markets in developing countries. The IFC has 182 member countries that “collectively determine its policies, and approve investments.” In fiscal year 2009, IFC’s new investments totaled USD 14.5 billion.

About Shree Mahila Self Employed Women’s Association (SEWA) Bank: SEWA Bank is a cooperative that was registered in 1974 and operates under the Reserve Bank of India (RBI), India’s central bank, and the state government of Gujarat. As of January 2011, SEWA Bank operates in the city of Ahmedabad and some rural districts of Gujarat. SEWA Bank’s members consist of poor women from underserved communities. The bank’s goal is to empower these women by providing them with access to financial services. As of December 2009, SEWA Bank reported to the Microfinance Information Exchange (MIX), the microfinance information clearinghouse, total assets of USD 31.7 million, a gross loan portfolio of USD 10.4 million, return on assets of 0.52 percent and return on equity of 3.06 percent.

[1] International Finance Corporation (IFC): “SEWA Bank: Summary of Proposed Investments”, http://www.ifc.org/ifcext/spiwebsite1.nsf/1ca07340e47a35cd85256efb00700cee/88AD5085750700168525780D005A407B

MicroCapital.org Brief, April 15, 2010: Indian Microinsurer Vimo SEWA to Advise Implementation of Namibian Microinsurance System, https://www.microcapital.org/microcapital-brief-indian-microinsurer-vimo-sewa-to-advise-implementation-of-namibian-microinsurance-system/

MicroCapital’s Microfinance Universe Profile: The World Bank Group

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+World+Bank+Group

MicroCapital’s Microfinance Universe Profile: International Finance Corporation (IFC)

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

MicroCapital’s Microfinance Universe Profile: Shree Mahila Self Employed Women’s Association (SEWA) Bank

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Shree+Mahila+Self+Employed+Women?s+Association+%28SEWA%29+Bank

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