MICROCAPITAL BRIEF: India’s Suryoday Microfinance Raises $15m in Equity as Aavishkaar Goodwell Exits

Suryoday Micro Finance Private Limited , a non-banking finance company providing microfinance services in India, recently raised INR 1 billion (USD 15 million) from investors including the Infrastructure Development Finance Company (IDFC) Bank; ASK Pravi; the Housing Development Finance Corporation (HDFC) Standard Life Insurance; Arpwood Investment Advisors; Kiran Vyapar, the investment arm of LN Bangur Group; Polaris Banyan Holding and Dr. Aravind Srinivasan [2].

Meanwhile, Aavishkaar Goodwell, an Indian-Dutch private equity fund investing in economic development projects, sold its 23-percent stake in Suryoday to responsAbility, Gaja Capital, Evolvence and Americorp Group, “generating strong dollar returns on the funds”. Aavishkaar had held the investment since the inception of the microfinance institution (MFI) in 2009 [1,3].

Suryoday had received in-principle approval from Reserve Bank of India (RBI) to function as a small finance bank (SFB) in 2015. As a result of these transactions, Suryoday’s shareholding comprises 49-percent foreign investments, the maximum allowed by RBI for a SFB without additional approval [2].

Suryoday reported a gross loan portfolio of USD 160 million and 717,000 total customers as of July 2016. Apart from credit services, the institution conducts business skills training; financial literacy training meant to promote savings; and health check camps including eye, dental and mammogram services.

The Netherlands’ Goodwell Investments partnered with India’s Aavishkaar to launch the Aavishkaar Goodwell India I in 2007 and Aavishkaar Goodwell India II in 2010, which together had committed capital totaling USD 48 million that was invested in 13 financial inclusion companies in India.

By Sharanya Madhavan, Research Associate

About Suryoday Microfinance

Suryoday Micro Finance Private Limited is an Indian microfinance institution that provides loans to low-income clients. Suryoday was established in 2008 as a non-banking financial institution (NBFI) and has its headquarters in Chennai. As of July 2016, it reported a gross loan portfolio of USD 160 million, 717,000 active borrowers and 192 branches across the country.

About Aavishkaar Goodwell

The two Aavishkaar Goodwell India funds are joint efforts of India’s Aavishkaar Venture Management Services and the Netherlands’ Goodwell Microfinance Development Company. Launched in 2007 and 2010, they raised a total of USD 48 million, which was invested in 13 financial inclusion organizations in India. Aavishkaar Goodwell India I is in the exit stage as of 2016. Aavishkaar Venture Management invests in early-stage enterprises in rural and other underserved geographies within South and Southeast Asia across sectors including agriculture, education, energy, healthcare, water and sanitation, technology, livelihood generation and financial inclusion. Among its funds are Aavishkaar Goodwell India I and Aavishkaar Goodwell India II, which hold investments from organizations including Goodwell Microfinance Development Company, the Netherlands Development Finance Company (FMO in Dutch), the World Bank Group’s International Finance Corporation (IFC) and Germany’s Deutsche Bank.

Sources and Additional Resources

[1] Goodwell Investments: Aavishkaar Goodwell exits small finance bank licensee Suryoday Micro Finance

[2] Spark Capital: Suryoday_Deal-Release

[3] The Hindu: Aavishkaar exits Suryoday Micro Finance

MicroCapital Universe Profile: Suryoday Microfinance

MicroCapital Universe Profile: Aavishkaar Goodwell

MicroCapital Universe Profile: IDFC Bank

MicroCapital Universe Profile: HDFC Bank

Microcapital Universe Profile: IFC

Microcapital Universe Profile: Deutsche Bank

Microcapital Universe Profile: FMO

Microcapital Universe Profile: responsAbility Investments