The International Finance Corporation, a member of the World Bank Group, recently announced that it will invest up to INR 1.4 billion (USD 20 million) in Grameen Financial Services Private Limited and INR 3.4 billion (USD 50 million) in Janalakshmi Financial Services (JFS), Bangalore-based microfinance institutions (MFIs). The investments will be executed via non-convertible debentures and senior debt, respectively, and are to be used to reach more borrowers who do not have access to formal finance.
As of March 2016, Grameen Financial, which is also known as Grameen Koota, reported a gross loan portfolio of INR 25.4 billion (USD 370 million) outstanding to 1.2 million active borrowers. As of March 2015, JFS reported to the US-based nonprofit Microfinance Information Exchange (MIX) return on assets of 2.25 percent, return on equity of 10.57 percent, a gross loan portfolio of USD 605 million and 2 million active borrowers. While Grameen Koota does not accept deposits, JFS is in the process of gaining approval to do so. As of 2015, IFC has 184 member countries that drive its policies and approve disbursements, and it reported total assets of USD 87.5 billion and net income of USD 445 million.
By Kevin van den Brink, Research Associate
About International Finance Corporation
The International Finance Corporation (IFC), a member of the US-based World Bank Group, offers loans, equity investments, technical assistance, and advisory and risk mitigation services to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2015, IFC has 184 member countries that drive its policies and approve disbursements, and it reported total assets of USD 87.5 billion and net income of USD 445 million.
About Grameen Koota
Grameen Financial Services Private Limited (GFSPL), popularly known as Grameen Koota, was founded in India in 1999 as a project of nongovernmental organization T Muniswamappa Trust and has since become an independent non-banking finance company (NBFC). GFSPL operates in the Indian states of Maharashtra, Karnataka and Tamil Nadu where it offers products such as microloans, vocational training loans, workshops and access to educational centers. As of March 2016, GFSPL reported a gross loan portfolio of INR 25.4 billion (USD 370 million) outstanding to 1,205,974 active borrowers. The institution does not accept deposits.
About Janalakshmi Financial Services (JFS)
Founded in 2000 by former Citibank executive Ramesh Ramanathan as a non-banking microfinance institution, India’s JFS operates under a two-tier structure: non-profit Jana Foundation holds the firm’s shares while for-profit JFS raises capital from investors as a financial services institution. Its products include group loans, individual loans, loans to micro-, small and medium-sized enterprises, pre-paid cash cards, micro-pensions, savings products and insurance. In September 2015, JFS received in-principal approval from the Reserve Bank of India (RBI) to convert to a small finance bank. As of April 2016, JFS operates in approximately 184 cities in India and manages assets of approximately USD 1.65 billion. As of March 2015, JFS reported to the US-based nonprofit Microfinance Information Exchange (MIX) a return on assets of 2.25 percent, return on equity of 10.57 percent, a gross loan portfolio of USD 605 million and 2 million active borrowers.
Sources and Additional Resources
[1] IFC, News, “Grameen Koota Financial Services: Summary of Investment Information”
[2] IFC, News, “Janalakshmi NCD: Summary of Investment Information”
MicroCapital Universe Profile: International Finance Corporation
MicroCapital Universe Profile: Grameen Koota
MicroCapital Universe Profile: Janalakshmi Financial Services
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