Washington, D.C. (PRWEB) November 16, 2005
Grameen Foundation USA (GFUSA) and Silicon Valley venture capitalist Vinod Khosla have orchestrated a half a million dollar equity investment in CASHPOR Financial and Technical Services, one of India’s leading microfinance institutions (MFIs). This substantial investment of $250,000 each from GFUSA and Khosla will strengthen microfinance activity in Uttar Pradesh and Bihar where CASHPOR has been the lone MFI, and help the organization reach its goal of 500,000 very poor households by 2010.
The latest initiative by GFUSA and Khosla to link private capital to microfinance, this investment will enable CASHPOR to leverage additional financing at least ten-fold from local commercial lenders, and underscores the growing interest of social investors in this approach.
“This equity infusion is in support of CASHPOR's path-breaking work to spread microfinance and its poverty-reducing power across northern India,” said Alex Counts, GFUSA president. “We are hopeful that they can reach their goal of serving a half million women with microfinance by 2010 and will provide additional support to aid them.” This is GFUSA’s first equity investment in one of its MFI partners and builds on its 5-year relationship with CASHPOR. To date, CASHPOR has received more than $500,000 in funding from GFUSA.
Microfinance has proven to be an effective strategy in reducing global poverty. Very poor people, mostly women, receive very small loans to start income producing businesses that enable them to improve their lives and help their families escape severe poverty. As recognition of its impact, the United Nations declared 2005 as the International Year of Microcredit.
A longtime supporter of microfinance, Vinod Khosla is particularly committed to building the industry in India. "I am happy to invest in CASHPOR Financial & Technical Services Ltd., as it is providing microfinance to the poor, and is the only MFI working in eastern UP and Bihar, said Khosla. “I hope that the Indian government in general, and the Reserve Bank in particular, will facilitate and promote mutually-beneficial and commercial relations between MFIs and banks, so that the huge amounts of loan funds needed by the poor to reduce their poverty will be made available to them.”
Founded in 1996, CASHPOR currently serves over 87,000 poor people in 7,000 rural villages in six districts of eastern Uttar Pradesh (Mirzapur, Chandauli, Ghazipur, Ballia, Mau and Deoria) and three across the border in Bihar (Buxar, Bhabua and Saran). Undeterred by a lack of infrastructure, high crime rates and societal tensions, CASHPOR chose this region because of its extremely high poverty rates. Its success as a sustainable organization, in spite of the challenging environment, has encouraged other MFIs to expand into parts of Uttar Pradesh.
About Grameen Foundation USA
Grameen Foundation USA (GFUSA) is a global non-profit organization that combines microfinance, technology, and innovation to empower the world's poorest people to escape poverty. Founded in 1997, GFUSA has established a global network of 52 partners in 22 countries that has impacted an estimated 5.5 million lives in Asia, Africa, the Americas, and the Middle East.
The Foundation sprang from the Grameen Bank of Bangladesh. Grameen Bank was started in 1976 by an economics professor, Dr. Muhammad Yunus, who was convinced that women could break through poverty by taking tiny loans to start or expand tiny businesses. Today, Grameen Bank serves nearly 5 million borrowers, with 10,000 families escaping poverty every month. As strategic global partners, GFUSA and Grameen Bank share a common vision, knowledge and success models to accelerate the microfinance industry's impact on the world's poorest people. Dr. Yunus, the founder and director of Grameen Bank, is a founding and current board member of GFUSA. For more information on Grameen Foundation USA, please visit http://www.gfusa.org.
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