MICROCAPITAL BRIEF: Microfinance Institutions (MFIs) Share, Asmitha of India, Again Looking to Merge

Share Microfin Limited and Asmitha Microfin Limited, two microfinance institutions (MFIs) based in Hyderabad, India, reportedly have rekindled efforts to execute a merger.The firms were considering such a move in 2011 but then called off their merger plans, as MicroCapital reported at the time [3]. According to Udai Kumar, founder of Share, both MFIs are waiting on the Central Bank’s implementation of the MFI Bill before moving ahead with the merger.

Alok Prasad, chief executive officer (CEO) of India’s Microfinance Institution Network, reportedly states that, “consolidation is the way forward for the MFI industry [in India]. Over the next three years, we could see several mergers in the MFI space.” Share and Asmitha’s combined portfolio would total approximately INR 30 billion (USD 555 million), which would rival that of Bandhan, which is based in West Bengal and reports a portfolio of INR 35 billion (USD 647 million).

Founded in 2002, Asmitha is registered as a public limited company and offers collateral-free group and individual loans to women primarily in rural areas. According to the US-based nonprofit Microfinance Information Exchange (MIX) Asmitha reports total assets of USD 241 million, a gross loan portfolio of USD 215 million, return on assets (ROA) of -11.9 percent, return on equity (ROE) of -45.7 percent and 1.08 million active borrowers as of December 31, 2011.

Share began operations in 1989 as a nonprofit and became a non-bank financial institution in 2000. It primarily offers loans to women, as well as training and micro-business consulting. As of 2011, Share reports total assets of USD 418 million, a gross loan portfolio of USD 338 million, ROA of -11.6 percent, ROE of -42.1 percent and 2.60 million active borrowers. Neither institution offer deposit services.

By Sarah Benali, Research Associate

About Asmitha Microfin Limited Asmitha Microfin Limited is a microfinance institution (MFI) based in Hyderabad, India. It offers collateral-free group and individual loans to women. Registered as a public limited company, Asmitha was founded in 2002 and operates primarily in rural areas. According to the US-based nonprofit Microfinance Information Exchange (MIX) Asmitha reported total assets of USD 241 million, a gross loan portfolio of USD 215 million, return on assets (ROA) of -11.9 percent, return on equity (ROE) of -45.7 percent and 1.08 million active borrowers as of December 31, 2011. Asmitha does not accept deposits.

About Share Microfin Limited Share Microfin Limited is a microfinance institution (MFI) based in Hyderabad, India. After beginning operations in 1989 as a nonprofit, Share was converted into a non-bank financial institution (NBFI) in 2000. It offers loans—primarily to women—as well as training and micro-business consulting. As of December 31, 2011, Share reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 418 million, a gross loan portfolio of USD 338 million, return on assets of -11.6 percent, return on equity of -42.1 percent and 2.60 million active borrowers. Share does not accept deposits.

About Bandhan Financial Services Private Limited Bandhan Financial Services Private Limited is a microfinance institution (MFI) based in Kolkata, India, that was founded in 2002. As of 2011, it operates approximately 1,550 branches in 18 states in India. It offers microenterprise loans as well as loans for health emergencies. As of December 31, 2011, Bandhan Financial Services reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 650 million, a gross loan portfolio of USD 599 million, return on asset of 6.44 percent, return on equity of 37.6 percent, USD 10.3 million in deposits and approximately 3.39 million borrowers.

Sources and Additional Resources

[1] Business-standard.com story: “Embattled MFIs embark on consolidation path,” October 2012, http://www.business-standard.com/india/news/embattled-mfis-embarkconsolidation-path/488754/

[2] MicroCapital.org story: “MICROCAPITAL BRIEF: Business Standard Reports on ‘New Breed’ of Small Indian Microfinance Institutions,” March 26, 2012, https://www.microcapital.org/microcapital-brief-business-standard-reports-on-new-breed-of-small-indian-microfinance-institutions/

[3] MicroCapital.org story: “MICROCAPITAL BRIEF: Indian Microfinance Institutions (MFIs) Spandana Sphoorty Financial, Share Microfin, Asmitha Microfina Call Off Merger After Restructuring Plans Approved,” November 1, 2011, https://www.microcapital.org/microcapital-brief-indian-microfinance-institutions-mfis-spandana-sphoorty-financial-share-microfin-asmitha-microfin-call-off-merger-after-restructuring-plans-approved/

[4] MicroCapital.org story: “MICROCAPITAL BRIEF: Indian Microfinance Institutions (MFIs) Share, Spandana Sphoorty, Asmitha Consider Merger, Continue Debt Restructuring Talks,” August 17, 2011, https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-bandhan-financial-services-raises-29m-in-equity-from-international-finance-corporation-ifc-arranged-by-intellecap-2/

MicroCapital Universe Profile: Asmitha Microfin Limited https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Asmitha+Microfin+Limited

MicroCapital Universe Profile: Share Microfin Limited https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=SHARE+Microfin+Limited

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: Microfinance Institution Network (MFIN)https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Microfinance+Institutions+Network+%28MFIN%29

Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page/.

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