25309 - Financial Information Network & Operations Pvt. Ltd.

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Summary of Proposed Investment

Project Number

25309

Company Name

FINO PAYTECH LIMITED

Date SPI Disclosed

Sep 7, 2006

Country

India

Industry

Financial Markets

Projected Board Date

Oct 9, 2006

Status

Active

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

C - No Impact

Previous Events

Approved : Mar 5, 2007
Signed : Mar 13, 2007
Invested : Jun 6, 2007

Project Description

Financial Information Network & Operations Ltd. (FINO) is a technology company that provides core banking solutions to agencies including micro-financial institutions, co-operative banks and banks (together, Micro Agencies) catering to the low income households. It also provides automated banking, government transfer services and other financial services for the vast un-banked and under-banked population in rural India through a biometrics based authenticated personal card solution. Having recognized that relying on traditional branch banking to cover rural India would be cost prohibitive, ICICI, India’s largest private sector bank, has incubated FINO and completed pilot testing with some Micro Agencies and their customers. IFC proposes to make an equity investment in FINO for expansion capital as the company seeks to scale operations. IFC is also seeking technical assistance grants to support this innovative rural banking service company.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	5.0

Development Impact

- Promote growth of Indian Micro Agencies:

With a robust technology solution, FINO will help Micro Agencies reach a larger population by making the data and credit management process reliable, simpler and cost-effective. Growth of this sector will improve the viability of the Micro Agencies, which in many cases currently lack economies of scale.

- Augment financial services across India:

Most Micro Agencies currently focus on provision of credit to their target market. FINO’s presence would enable provision of services such as insurance, savings, remittances, and government payments. The Reserve Bank of India has recently allowed Micro Agencies to serve as business correspondents through which remittances and other financial services may be offered.

- Increase credit to underserved segments in rural and urban India:

The absence of a reliable information, efficient distribution mechanism, and effective financial controls has constrained credit flows across India. FINO offers an efficient, scaleable solution to improve cost effectiveness and reliability of customer data for Micro Agencies, enabling them to attract capital for lending across underserved segments in India.

- Market adoption:

To expand its scope of services and clients, FINO seeks to establish an arms-length relationship with ICICI. Management believes that IFC’s role as a trusted intermediary would help FINO establish the independence necessary to encourage the banking community in India to more broadly adopt FINO’s product.

- Technical assistance and capability building:

The services offered by FINO are unique to the Indian market. Many Micro Agencies and their customers require training to use the technology solution offered by FINO. Management believes that IFC support through its technical assistance program would accelerate adoption of the FINO solution and thus provision of banking services in underserved markets.

- Early stage financing:

Limited financing is available for start-up technology related companies like FINO. NASSCOM, India’s software association, has asked IFC to help promote growth in the software industry by investing in early stage technology companies. An investment by IFC would fill a gap in the market and enable FINO to reach a stage where funding options are more plentiful and, if successful, improve the prospects of similar companies in search of early stage financing.

IFC''s early review of this investment has identified the following environmental, social, health and safety issues: fair, healthy and safe working conditions and fire and life safety which will be reviewed during appraisal.

Performance standards that are expected to be applicable for this project may therefore include:

- PS2: Labor and Working Conditions;
- PS4: Community Health, Safety and Security.

Based on this early review, the project has been provisionally categorized as C.

Contacts

For Inquiries About the Project, Contact

Rishi Gupta, Chief Financial Officer
Financial Information Network & Operations Pvt Ltd
Ground Floor, South Tower, East Wing, ICICI Bank Towers
Bandra-Kurla Complex, Mumbai 400051, INDIA
Te: +91-22-6696 7087
E-mail: rishi.gupta@fino.co.in
Website: www.fino.co.in

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IFC Corporate Relations
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Washington DC 20433
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This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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