Michael and Susan Dell Foundation, Lok Capital invest in Kolkata micro finance firm

11 August 2008

India focused micro-finance venture capital fund Lok Capital LLC and Michael & Susan Dell Foundation (MSDF) have announced an investment in Arohan Financial Services Limited, a Kolkata-basede micro-finance institution to provide equity capital and capacity building support.

Promoted in 2006 by MBA graduate and microfinance professional, Shubhankar Sengupta, with incubation support and equity financing from the $23-million equity fund, Bellwether Microfinance Fund,  Arohan aims to provide financial services to the socio-economically disadvantaged segments in a scalable, sustainable manner to enhance the quality of life of its clients, and also deliver returns to its investors.

"A significant impact in the provision of microfinance, especially urban microfinance, would come from new entrants into the microfinance space in India," says Viswanatha Prasad, managing director of Bellwethwer. ''We are delighted that Arohan has earned the confidence of equity investors such as Lok and MSDF in a short period of two years since its inception.''

Currently operating in Kolkata, Arohan plans to expand its operations to other urban centres in eastern India, and diversify its product portfolio.

''The investment by Lok Capital and Michael & Susan Dell Foundation is a big step for Arohan in several ways," says Sengupta. "It represents the confidence that the investor community has developed in us, a start-up microfinance institution run by a very young group of people, focused on the hitherto neglected urban microfinance market.

"It also confirms the faith of the microfinance industry that this business can be financially sustainable, even while meeting the social objective of financial inclusion. Third, of course, the enhanced capital and broad based shareholding that we now have, will help us leverage debt funds in our goal of reaching 400,000 clients by 2011.''