To help advance financial inclusion for underserved women in rural India, MicroVest has invested in Sonata Finance, one of the largest women-focused microfinance institutions in the country. The $6 million investment will help Sonata expand the availability of microfinance loans to female-owned MSMEs and enable women’s economic empowerment in the region.
A recent IFC study estimates that 90% of female entrepreneurs in India do not receive financing from formal institutions, with respondents stating that personal resources are their most preferred option for finance. Furthermore, women entrepreneurs seeking to scale-up their businesses must also grapple with challenges such as limited product awareness and/or financial literacy.
Founded in 2006, Sonata Finance is one of the largest microfinance institutions operating in northern and central India. Sonata serves more than 700k borrowers across 464 branches and provides a variety of individual and group loans that support income-generating activities for women in rural areas across India. Sonata primarily operates under a group loan structure with 10 to 20 members per group. In an effort to help customers meaningfully improve their lives, Sonata also provides financing for select needs such as home improvement and sanitation upgrades. Specifically, the company has set a goal that at least 50% of participants in their loan programs cross the poverty line within five years.
This is MicroVest’s 3rd loan cycle with the company.