Indian microfinance institution (MFI) Satin Creditcare Network Limited recently raised INR 410 million (USD 7.5 million) by selling a stake of approximately 20 percent to three microfinance investment funds in undisclosed portions: Danish Microfinance Partners K/S (DMP), MicroVest II LP and ShoreCap II Limited. Based in Copenhagen, DMP focuses its investments on MFIs and small and medium-sized enterprises (SMEs) in developing countries. ShoreCap II is managed by US-based asset manager Equator Capital Partners and invests in MFIs, small business banks and nonbank financial institutions in Africa and Asia. Equator Capital Partners has invested approximately USD 5 billion in 20 institutions as of April 2013. MicroVest II is a fund managed by US-based, for-profit company MicroVest Capital Management, which reported total assets of USD 148 million as of October 2012. The gross asset value of Microvest II LP was USD 57 million as of the same date.
At the same time, Lok Captial, a Mauritus-based company that invests in Indian social ventures, sold its stake in Satin to MicroVest. Lok Capital reportedly doubled its money on the stake, which it purchased in April 2008, to the equivalent of USD 1.8 million.
According to a statement from Unitus Capital, which has offices in India and the US and served as advisor to the transactions, “The exit of Lok Capital is the first complete exit of this scale in the Indian microfinance sector and underlines the buoyancy and growth potential of the sector despite having gone through testing times recently.”
As of December 2012, Satin reported total assets of USD 100 million, a gross loan portfolio of USD 76.6 million and approximately 377,000 active borrowers. As of March 2012, the institution reported return on assets of 0.52 percent and return on equity of 1.79 percent. It does not accept deposits.
By Nicole Boyd, Research Associate
About Satin Creditcare Network Limited
Established in 1990, Satin Creditcare Network Limited is an Indian microfinance institution based in Delhi. As of December 2012, Satin reported total assets of USD 100 million, a gross loan portfolio of USD 76.6 million and approximately 377,000 active borrowers. As of March 2012, the institution reported return on assets of 0.52 percent and return on equity of 1.79 percent. It does not accept deposits.
About Lok Captial LLC
Lok Capital LLC is a limited-life, limited-liability company based in Mauritius that provides equity and equity-linked investments to microfinance institutions (MFIs) in India. It consists of a venture capital fund, Lok I, and the Lok Foundation. Lok I was launched in 2006 with USD 22 million in investments from Accion, the Commonwealth Development Corporation (CDC), Development International Desjardins, Netherlands Development Finance Company (FMO), International Finance Corporation (IFC), Kreditanstalt für Wiederaufbau (KfW) and responsAbility Social Investments. The fund’s investments generally range in size from USD 500,000 to USD 3 million. Lok II was closed in 2012 with USD 65 million. Previous investors include IFC, CDC, KfW, FMO and responsAbility along with new investors Proparco and ASN Novib. The Lok Foundation provides technical assistance to Indian MFIs.
About MicroVest II
MicroVest II is an equity fund that invests in microfinance institutions in emerging markets. MicroVest II closed in February 2010 with USD 60 million in commitments. The fund aims to serve as a capital intermediary between investors and financial institutions that serve impoverished people. Lead investors in the fund include the World Bank Group’s International Finance Corporation and Kinnevick New Ventures AB, a venture capital fund. MicroVest II is managed by MicroVest Capital Management, a for-profit organization based in the US capital, Washington, D.C. Microvest Capital Management reported total assets of USD 148 million as of October 2012. The gross asset value of Microvest II, LP was USD 57 million as of the same date.
About Shorecap II Fund
The Shorecap II Fund is a private equity fund that was established to make investments in microfinance institutions, small business banks and nonbank financial institutions that provide financial services and offer financial products to micro- and small-scale entrepreneurs in Africa and Asia. The fund’s mission is to contribute to the alleviation of poverty by increasing access to financial services and improving financial institutions. Shorecap II, which is managed by US-based asset manager Equator Capital Partners, is a successor to Shorecap International, a microfinance investment vehicle that was launched in 2003. Equator Capital Partners has invested approximately USD 5 billion in 20 institutions as of April 2013.
About Danish Microfinance Partners K/S (DMP)
Danish Microfinance Partners K/S (DMP) is an investment fund based in Copenhagen, Denmark COMMA that invests in microfinance institutions (MFIs) and small and medium-sized enterprises (SMEs) in developing countries. Financial information on DMP is not available.
Sources and Additional Resources:
VC Circle. “Satin Creditcare raises $7.6M in new funding, Lok Capital scores 2x in exit,” http://www.vccircle.com/news/micro-finance/2013/04/05/satin-creditcare-raises-76m-new-funding-lok-capital-scores-2x-exit
Livemint. “Lok Capital exits Satin Creditcare,” http://www.livemint.com/Industry/lT1oI43p0yLKAQKWMUlbCI/Lok-Capital-exits-Satin-Creditcare.html
MicroCapital. September 6, 2012, “MICROCAPITAL BRIEF: Bellwether Microfinance Fund, Michael & Susan Dell Foundation Sell Shares in Ujjivan of India to Lok Capital of Mauritius, Undisclosed Social Investor,” https://www.microcapital.org/microcapital-brief-bellwether-microfinance-fund-michael-susan-dell-foundation-sell-shares-in-ujjivan-of-india-to-lok-capital-of-mauritius-undisclosed-social-investor/
MicroCapital. May 7, 2012, “MICROCAPITAL BRIEF: Lok Capital to Exit Indian Microfinance Institution Janalakshmi,” https://www.microcapital.org/microcapital-brief-lok-capital-to-exit-indian-microfinance-institution-janalakshmi/
MicroCapital. August 9, 2011, “MICROCAPITAL BRIEF: Indian Microfinance Institution Satin Creditcare Reports $22m in Capital Raises, Securitizations; Upgraded by CARE Ratings to ‘MFI 2’,” https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-satin-creditcare-reports-22m-in-capital-raises-securitizations-upgraded-by-care-ratings-to-%e2%80%9cmfi-2%e2%80%9d/
MicroCapital. April 10, 2008, “PRESS RELEASE: Microfinance Venture Capital Fund Lok Capital to Invest $1.25m in India’s Satin Creditcare, With More to Come From Journalist Swaminathan Aiyar,” https://www.microcapital.org/press-release-microfinance-venture-capital-fund-lok-capital-to-invest-125m-in-indias-satin-creditcare-with-more-to-come-from-journalist-swaminathan-aiyar/
MicroCapital Universe Profile: Lok Captial LLC https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+Capital+LLC
MicroCapital Universe Profile: Satin Creditcare Network Limited https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Satin+Creditcare+Network+Ltd
MicroCapital Universe Profile: MicroVest II
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microvest+II
MicroCapital Universe Profile: Shorecap II Fund
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ShoreCap+II+Fund+%28SCII%29
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