MICROCAPITAL BRIEF: Base of Pyramid Asia (BOPA) Invests $2.5m in Equity in Indian Microfinance Institution (MFI) Sambandh Finserve

Base of Pyramid Asia (BOPA) Private Limited, a microfinance investment firm in Singapore, recently invested USD 2.5 million to buy a stake of undisclosed size in Sambandh Finserve Private Limited, an Indian microfinance institution that is organized as a non-banking financial company. Sambandh will use the proceeds to expand its geographic reach as well as invest in new technology to optimize its business operations. Sambandh CEO Deepak Kindo said, “Sambandh envisages to be a strong regional player and transform the lives of the underprivileged in this Chhotanagapur region. Coming together [with] BOPA will help us achieve our long-term goals of building a sustainable financial institution with best global practices in its operations, which will translate into holistic impact at the grassroots.”

Created in 2006, Sambandh is a non-deposit taking MFI that offers insurance and loan products primarily to Indian women in low-income communities. The MFI offers three loan products with sizes ranging from INR 5,000 (USD 73) to INR 25,000 (USD 364), annual interest rates from 21 to 25 percent, and terms of up to 24 months. Sambandh’s insurance products include life insurance, medical insurance and micropensions. As of March 2017, it reported total assets of INR 1.4 billion (USD 21 million), short-term outstanding loans of INR 761 million (USD 12 million) and long-term outstanding loans of INR 148 million (USD 2.3 million). As of March 2018, the MFI serves 140,000 clients from 48 branches in the Indian states of Chhattisgarh, Jharkhand and Odisha.

Established in 2011, BOPA is a holding company that has equity placements in one microfinance institution each in Cambodia, East Timor, India, Kazakhstan, Kyrgyzstan, Myanmar, Tajikistan and Vietnam. A typical BOPA investment ranges in size from USD 250,000 to USD 1 million. As of December 2017, the firm reported total assets of USD 12 million and an aggregate investee loan portfolio of USD 81 million serving 192,000 people.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

BOPA press release
http://www.bopa-microfinance.com/wp-content/uploads/2018/07/Press-Release_SambandhEquity-Infusion.pdf

Sambandh background
http://www.sambandhfin.com/who-we-are/

Sambandh annual report
http://www.sambandhfin.com/wp-content/uploads/2018/01/Annual-Report-2017_2-min.pdf

BOPA data
http://www.bopa-microfinance.com/investments/

MicroCapital Brief; June 22, 2017; IFU, Finnfund, Danish Family Office Invest $8m in BOPA for Asian Microfinance
https://www.microcapital.org/microcapital-brief-ifu-finnfund-danish-family-office-invest-8m-bopa-asian-microfinance/

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