Private equity fund Blackstone is set to pick up around 20% equity in FINO, a tech company that bankers say has huge potential because of its success in providing last-mile connectivity to those untouched by financial services. The talks which are at an advanced stage value the company at around Rs 700 crore after an investment of about Rs 140 crore.
FINO was promoted in 2006 by lenders like ICICI Bank, which acted as an incubator for the fledgling business. The company was initially know as Financial Information Network and Operations and was launched under the leadership of Nachiket Mor, then deputy managing director of ICICI Bank. Its founder CEO Manish Khera was originally a joint general manager with ICICI Bank and its present chairman Sandeep Bakhshi is MD of ICICI Prudential Life. Other shareholders include Corporation Bank, HSBC , ICICI Lombard, IFC, IFMR Trust, Indian Bank, Intel, LIC and Union Bank.
The demand for service providers such as FINO is expected to grow because of financial inclusion targets set by the finance minister. In his budget speech, Pranab Mukherjee had said that banks will extend services to every village having a population of 2,000 and more by March 2012. According to bankers, this target is not feasible under the conventional bank branch model. Banks will have to rely heavily on business correspondents, technology and mobile connectivity to achieve this targets.
Although urban bankers see it is a back office service provider because of its technology platform, FINO has a huge reach in rural India where it facilitates no-frill bank accounts, universal health insurance and delivers government pension. For banks, FINO acts as business correspondent allowing customers to transact through a number of media such as ATM/ Micro Deposit Machine, point of sales terminals or mobiles.
Source: Times of