IBM signes deal worth Rs 550 crore with microfinance firm Janalakshmi Financial Services

Tuesday, July 15, 2014

NEW DELHI: International Business Machines (IBM) has signed a deal worth Rs 550 crore with microfinance firmJanalakshmi Financial Services, according to people familiar with the discussions. IBM’s consulting division, along with its Institute of Business Value, is leading the engagement, a person familiar with the transaction said. The deal involves application development, maintenance and infrastructure management for Janalakshmi Finance.

“We’ll make an announcement in a couple of days,” said Ramesh Ramanathan, chairman of Janalakshmi Financial. IBM India is expected to make an announcement this Tuesday. The company has not responded to an email query sent last week. The firm has in the past worked with Wipro and recently outsourced its back-office work to the Indian unit of Accenture.

IBM rode high on the wave of information technology spending by the telecom sector in India in early 2000s, signing deals with the top three telecom companies in India, but is now looking at other businesses to ink large deals as the telecom market matures and smaller vendors compete more effectively for contracts.

Over the past year, the Big Blue has been embroiled in a series of fraud allegations, which led to the renegotiation of its contract with India’s top telecom company Bharti-Airtel this April.

While IBM still manages the IT infrastructure and services at the top three telcos in India, analysts have questioned if IBM would be able to retain its contract with Vodafone and Idea Cellular once they come up for renewal in 2017 and 2019, respectively. In spite of the problems, IBM commanded 12.1 per cent of the information technology services market in India in the second half of 2013, according to research firm IDC.

Source: Economic Times India (link opens in a new window)

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financial capability, financial inclusion, financial services, microfinance