Vinod Khosla, the world's No. 2 ranked venture capitalist, has granted $5 million to IIT-Delhi to fund an IT school at the Indian Institute of Technology, Delhi.

An alumnus of IIT-Delhi, Khosla's gesture is seen as his gift to the institute from where he completed his engineering degree. The curriculum for the course at the IT will be decided soon.

Khosla, partner in Melno Park, California-based venture fund Kleiner, Perkins, Caulfield and Byers also has ambitious plans to fund several micro finance institutions in Indian villages and towns.

Inspired by the success of Bangladesh's Grameen Bank, Khosla hopes to recreate the magic in rural India. He believes that there is immense potential in the micro-finance sector in India as it will ensure a steady inflow of capital.

Hyderabad-based, SHARE (Society for Helping and Awakening Rural Poor Through Education) -- founded in 1991 -- will be one of the beneficiaries of his grant. In April, SHARE granted loans worth $75 million to 30,000 families in Hyderabad.

Khosla is also said to be in talks with three institutions in Pune, a city where he did his schooling. The deals have not been finalised yet.

Sources said that Khosla's focus is now on microfinance and charity and he intends to invest funds into this sector.

With the mission of making a 'social impact,' Khosla hopes to encourage microcredit to other countries like Africa.