South Asia

IFC-Supported Au Financiers Reaches over 100,000 Small Business Owners in Rural India

May 2, 2012 -- First-time borrowers in India's economically stressed states can access funding to support their small enterprises thanks to Rajasthan-based IFC client Au Financiers (Au), a non-banking finance company. IFC's inclusive growth resolve in South Asia has translated into growing opportunities for "un-banked' communities in low-income and rural parts of India, where financing options have barely been available.

One such first-time borrower from Jaipur is Girdhari Ram, who struggled to make ends meet as a driver in a transportation company. In 2002, with a loan from Au Financiers, Girdhari started his own transport company. Over time, he expanded his business and now operates five commercial vehicles. Girdhari has since repaid most of his loans from the profit his business generates. Today, he employs a staff of four whom he looks after and compensates well.

Girdhari’s two sons study in a good school in the city. He hopes they will complete their studies and eventually work in private sector jobs. “It would give me and my wife immense pride to see our children take up respectable jobs,” says Girdhari with a smile.

Shaping the Future

Set up in 1996, the company adopted the name Au Financiers (India) Private Limited in 2005. By 2003, the company had disbursed over $30 million in loans. The company's strategic relationship with India's respected HDFC Bank, followed by an Indian private equity firm, brought both equity and management acumen in subsequent years.

IFC came in with its investment in 2010 and again in 2012. IFC's support helped bring in more banks to finance Au Financiers' growth plans. IFC also assisted Au in developing a low income housing finance business plan and running learning programs on housing finance business, risk management and other areas including good governance practices.

Today, IFC funded Au Financiers reaches over 100,000 customers, extending loans to transport operators, to micro and small entrepreneurs and farmers most of whom have low income earnings. Au's borrowers typically come from rural and semi-urban regions and have found it challenging to access credit for business activities.

Nurturing Dreams

In the words of Au Financiers' Managing Director and Founder Sanjay Agarwal, "We believe in an inspiring vision: to provide a strong backing to local entrepreneurs to help transform lives. Our staff are committed and create a bond of respect and humanity with our customers. We lend to talented people so we can nurture their dreams." FM Director for Asia Serge Devieux feels humbled by the pioneering work led by Au.

A responsible corporate citizen, the company provides financial support to a grassroots organization helping educate over 200 underprivileged students from Jaipur, and contributes to Akshay Patra, an organization that provides midday meals to children. Au also sponsors education of children of its employees from economically stressed backgrounds. The company has also been a front runner in Rajasthan in phasing out vehicles operating on diesel and petrol. As part of the company's conscious effort, 99 percent of their lending is for vehicles with greater fuel efficiency, lower emissions and new technologies.

According to IFC South Asia Director Tom Davenport, “Au Financiers is truly an inspirational institution with an enthusiastic leadership, delivering excellent financial and developmental results in unserved markets.” Awarded the "Portfolio Project of the Year" at the recently concluded FM Knowledge Forum held in Washington, the project competed against several very deserving portfolio projects from over 700 projects that the FM team manages globally.

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