Bandhan Financial Services, an Indian microfinance institution (MFI) that offers loans for health emergencies and microenterprise, reportedly has raised INR 1 billion (USD 16.3 million) in nonconvertible debentures (NCDs) from an unnamed Swiss investor. Bandhan issued the NCDs at approximately 14 percent for a term of three years with an option to extend for another three years. NCDs are financial instruments that allow organizations to raise funds by acquiring debt without collateral. The purpose of the loan is to increase Bandhan’s capital base in order to fund its expansion.
As of 2012, Bandhan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 983 million, a gross loan portfolio of USD 815 million, 4.4 million active borrowers, return on assets of 6.4 percent and return on equity of 37 percent.
By Meraj Husain, Research Associate
About Bandhan Financial Services
Bandhan Financial Services Private Limited is a microfinance institution (MFI) based in Kolkata, India, that was founded in 2002. As of 2014, it operates approximately 2,000 branches in 22 states and union territories in India. It offers microenterprise loans as well as loans for health emergencies. As of 2012, Bandhan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 983 million, a gross loan portfolio of USD 815 million, 4.4 million active borrowers, return on assets (ROA) of 6.4 percent and return on equity (ROE) of 37.6 percent. The institution does not accept deposits.
Sources and Additional Resources
[1] The Economic Times: “Bandhan Financial Services raises Rs 100 crore from in NCDs,” http://articles.economictimes.indiatimes.com/2014-03-25/news/48559000_1_ncds-bandhan-financial-services-100-crore
MicroCapital, March 2, 2014, “Bandhan of India Borrows $26m from International Finance Corporation (IFC), Seeks $16m from Swiss Investor,” https://www.microcapital.org/microcapital-brief-bandhan-of-india-borrows-26m-from-international-finance-corporation-ifc-seeks-16m-from-swiss-investor/
MicroCapital, January 14, 2014, “Standard Chartered Bank Loans $12m to India’s Bandhan Financial Services for Microenterprise Lending,” https://www.microcapital.org/microcapital-brief-standard-chartered-bank-loans-12m-to-indias-bandhan-financial-services-for-microenterprise-lending/
MicroCapital, July 23, 2013, “India’s Bandhan Microfinance Institution to Cut Interest Rates as a Commercial Bank,” https://www.microcapital.org/microcapital-brief-indias-bandhan-microfinance-institution-to-cut-interest-rates-as-a-commercial-bank/
MicroCapital Universe Profile: Bandhan Financial Services Private Limited https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bandhan+Financial+Services+Private+Limited
MicroCapital Universe Profile: International Finance Corporation (IFC) https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29
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