India Microfinance Equity Fund

To ease the tight liquidity situation, in the FY 2012, GoI stepped in with creation of a Rs.100 crore Fund (viz., IMEF in the Union Budget 2011-12), operated through SIDBI, to strengthen capitalization of smaller, socially oriented MFIs, especially in underserved states/areas. The allocation under IMEF has been increased by Rs.200 crore in FY 2013-14. The assistance under the Fund is expected to help the MFIs leverage more debt funds from the banks and financial institutions and help in increased flow of assistance to the poor in the unserved/underserved areas of the country. As on September 30, 2017, 65 MFIs were committed assistance under the fund amounting to INR 195.50 Crore.

An impact assessment study commissioned by SIDBI to evaluate the impact of IMEF funding on the MFI sector has revealed :

  • The fund attributed for a high and positive impact on the MFIs in terms of building their overall sustainability in a large proportion of MFIs and had the highest impact in the area of institutional sustainability.
  • There was a remarkable improvement in performance of the MFIs in the area of outreach and lending practices and operational efficiency.
  • The impact was uniform across MFIs irrespective of their regulatory status.