Lok Capital, a Mauritius-based microfinance investment vehicle, has reportedly announced plans to sell its stake in Janalakshmi Financial Services (JFS), an Indian microfinance institution (MFI). Lok invested INR 16 million (USD 229,000) in March 2007 as a series A investor, acquiring an undisclosed share of the MFI. Lok sold 25 percent of its stake in 2011 for INR 27.7 million (USD 518,000). The Michael and Susan Dell Foundation, a US-based nonprofit that provides grants to socially-oriented organizations, and Bellwether Microfinance Fund, an Indian microfinance investment vehicle, also invested in JFS during its start-up period.
JFS currently is raising approximately INR 500 million (USD 9.4 million) from private equity investors to allow these organizations to exit. According to a statement attributed to Lok Capital co-founder and partner Mr Vishal Mehta, Lok Capital is “now looking to exit as the company has achieved the desired scale.”
JFS raised an investment of INR 500 million (USD 9.4 million) in 2010 from Treeline Asia Master Fund, and Asian hedge fund, and another investment of INR 650 million (USD 12 million) in 2011 from Citi Venture Capital International, a private equity investor and investment advisor that is part of US-based financial firm Citi. As of March 31, 2010, JFS reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 25.5 million, a gross loan portfolio of USD 14.9 million, 82,000 active borrowers, return on assets (ROA) of -3.05 percent and return on equity (ROE) of -8.74 percent.
The MFI currently has operations in 40 cities across 11 Indian states.
By Charlotte Newman, Research Associate
About Janalakshmi Financial Services
Janalakshmi Financial Services (JFS) is a microfinance institution (MFI) located in India. It is focused primarily on offering loans, savings and microinsurance in urban areas. As of March 31, 2010, JFS reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 25.5 million, a gross loan portfolio of USD 14.9 million, 82,000 active borrowers, return on assets (ROA) of -3.05 percent and return on equity (ROE) of -8.74 percent.
About Lok Capital
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), Developement International Desjardins, Netherlands Development Finance Company (FMO), International Finance Corporation (IFC), Kreditanstalt für Wiederaufbau (KfW) and responsibility 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. Investors included previous investors IFC, CDC, KfW, FMO and responsAbility along with new investors Proparco and ASN Novib. The Lok Foundation provides technical assistance to Indian MFIs.
About Michael and Susan Dell Foundation
The US-based nonprofit Michael & Susan Dell Foundation was established in 1999 to provide grants and equity investments to organizations that focus on education, childhood health and family economic stability. The foundation has committed approximately USD 700 million to nonprofit organizations working in communities in the United States, South Africa and India. As of 2010, the foundation reported total assets of USD 906 million.
About Bellwether Microfinance Fund
The Bellwether Microfinance Fund is an onshore Indian venture fund that makes equity investments in microfinance institutions (MFIs). The fund invests in start-ups as well as established, medium-sized NGO MFIs. With holdings of USD 20, the million fund is managed by Caspian Advisors of India.
Sources and Additional Resources:
Economic Times: “Lok Capital May Exit Janalakshmi Financial Services,” http://articles.economictimes.indiatimes.com/2012-04-18/news/31361335_1_lok-capital-janalakshmi-financial-susan-dell-foundation
MicroCapital.org story, April 16, 2012, “MICROCAPITAL BRIEF: Lok Capital, Proparco Invest $5m in Equity in India’s IFMR Rural Channels and Services,” https://www.microcapital.org/microcapital-brief-lok-capital-proparco-invest-5m-in-equity-in-indias-imfr-rural-channels-and-services/
MicroCapital.org story, June 25, 2011, “MICROCAPITAL BRIEF: Indian Microfinance Institution (MFI) Janalakshmi Raises $14m in Equity Led by Citi Venture Capital International (CVCI),” https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-mfi-janalakshmi-raises-14m-in-equity-led-by-citi-venture-capital-international-cvci/
MicroCapital Universe Profile: Janalakshmi Financial Services
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Janalakshmi+Financial+Services+%28JFS%29
MicroCapital Universe Profile: Lok Capital
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+Capital+LLC
MicroCapital Universe Profile: Michael and Susan Dell Foundation
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Michael+and+Susan+Dell+Foundation
MicroCapital Universe Profile: Bellwether Microfinance Fund
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bellwether
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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