MICROCAPITAL STORY: Indian Grameen Services (IGS) to Expand Microfinance Services into Poorest Regions of India

Indian Grameen Services (IGS), the research and development arm of BASIX, a financial and technical services group based in Hyderabad, India plans to expand its business operations into Bihar, Jharkhand, Chattisgard, Uttaranchal, Uttar Pradesh and parts of Rajasthan, all of which rank among the poorest parts of India. Please note that neither IGS nor BASIX is affiliated with Grameen Bank.

IGS is a nonprofit organization within the BASIX group that focuses on human resource and institutional research and development for BASIX, as well as other microfinance and community institutions. Its work has included studies on the feasibility of introducing BASIX services to new areas, and training other agencies in relevant sectors in providing project support. IGS is also active in offering various financial services, such as credit extension, insurance, and money transfer, as well as developing distribution channels and systems for delivery of these services. According to N.V. Ramana, CEO of BASIX, the expansion of IGS’ services will enable the company to “focus on poorer areas, where financial inclusions are low”.

According to its annual financial report ending March 31, 2007, IGS has net current assets of INR 115.1 million (USD 2.9 million), total share capital of INR 83,000 (USD 2,110), net deficit income of INR 16,541,000 (USD 420,441), total investments of INR 16,509,000 (USD 419,628) and total distributed loans of INR 8,901,000 (USD 226,247) from projects funded by partner organizations. IGS is currently led by managing director, Sankar Datta.

BASIX, also known as Bhartiya Samruddhi Finance Limited, was established in 1996 and is composed of a group of five financial services and technical assistance companies: Bhartiya Samruddhi Investments and Consulting Services, Ltd. (BASICS Ltd.), the holding company through which equity and debt investments are made in the group; Bhartiya Samruddhi Finance Ltd. (Samruddhi), a non-bank finance company that provides credit and technical assistance; Krishna Bhima Samruddhi Local Area Bank, Ltd., a bank licensed by the Reserve Bank of India (RBI) to provide microfinance services and technical assistance in three districts; Sarvodaya Nano Finance Ltd. (Sarvodaya), also a non-bank finance company owned by women’s self-help groups and managed by BASICS Ltd.; and India Grameen Services (IGS).

According to MIX, the microfinance information clearinghouse, as of March 31, 2007, BASIX reported a gross loan portfolio of USD 31.98 million, total assets of USD 40.89 million, debt-to-equity ratio of 559 percent, return on assets (ROA) of 1.42 percent, and return on equity (ROE) of 8.14 percent. Among 198,282 active borrowers (47.4% women), its portfolio at risk (PAR) was 2.11 percent. MIX also reports that BASIX received a grade of mfR2 (on a eight-point scale of 1 to 8, with 1 being the highest) in the May 2003 rating by CRISIL, India’s leading rating agency.

By Mary Fu

Additional Resources:

The Financial Express: “IGS eyes “poorer” terrains to meet micro finance targets”

Indian Grameen Services: “IGS Financial – 2006-2007”

BASIX: Home

BASIX: IGS

International Fund for Agricultural Development (IFAD:( “Enabling the rural poor to overcome poverty in India”

Microfinance Information eXchange (MIX): Profile for BASIX

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