Ujjivan Financial Services, a microfinance institution (MFI) headquartered in Bangalore, India, has raised INR 40 crores (USD 8.82 million) of debt capital through the issuance of non-convertible debentures (NCDs) to Developing World Market (DWM) (Cyprus) Limited, a member company of Developing World Markets, a US-based social investment fund manager.
The timing of a debt issuance to an India-based MFI is significant given the recent turmoil in the microfinance sector in India’s Andhra Pradesh state. With liquidity in India’s microfinance sector drying up, Gautam Verma, a director at Bangalore advisory firm Unitus Capital, says that the transaction will help “reaffirm the positive investor sentiments towards the Company and the sector in general.”
The issuance was arranged exclusively by Unitus Capital. The NCDs are listed on the Bombay Stock Exchange and were fully subscribed to by DWM (Cyprus) Limited [1].
By John Howard-Smith, Research Associate
About Ujjivan Financial Services: Ujjivan Financial Services is a microfinance institution (MFI) based in Bangalore, India, that offers loans and insurance. It was founded in 2004 and focuses on low-income women in urban and semi-urban areas. Its products include business loans, educational loans, emergency loans and life insurance. As of September 2010, Ujjivan had total assets of USD 144 million and a gross loan portfolio of USD 136 million. As of 2009, Ujjivan reported return on equity (ROE) of 9.4 percent and return on assets (ROA) of 3.2 percent.
About Developing World Markets (DWM): Developing World Markets (DWM) is a US-based asset manager and investment bank dedicated to making socially positive investments to promote sustainable economic development. It provides both debt and equity investments to microfinance institutions (MFIs) and other socially motivated organizations. It currently has USD 600 million assets under management and has invested in approximately 100 MFIs in approximately 30 countries.
About Unitus Capital: An affiliate of Unitus Inc., a nonprofit with operations in India and the US, Unitus Capital is a financial advisory firm that specializes in arranging capital for microfinance institutions (MFIs) and other enterprises that aim to benefit the poor. Based in Bangalore, India, Unitus Capital offers financial advisory and capital markets services to clients in Asia. Between 2004 and 2010, Unitus Capital reports having arranged USD 25 million in debt capital for microfinance institutions (MFIs).
[1] Ujjivan Financial Services Press Release: “Ujjivan Raises Rs.40 Crores through Non-Convertible Debentures”, http://www.ujjivan.com/news_400_Million_raised_from_FII_through_BSE-listed_NCDs.htm
MicroCapital.org story, January 4, 2011: “MICROCAPITAL BRIEF: Rating Agency Crisil Downgrades Five Indian Microfinance Institutions (MFIs)”, https://www.microcapital.org/microcapital-brief-rating-agency-crisil-downgrades-five-indian-microfinance-institutions-mfis/
MicroCapital.org story, December 24, 2010: “MICROFINANCE BRIEF: State Bank of India (SBI) Considers Restructuring Loans to “Non-Performing” Microfinance Institutions (MFIs)”, https://www.microcapital.org/microfinance-brief-state-bank-of-india-sbi-considers-restructuring-loans-to-%E2%80%9Cnon-performing%E2%80%9D-microfinance-institutions-mfis/
MicroCapital’s Microfinance Universe profile: Ujjivan Financial Services, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Ujjivan
MicroCapital’s Microfinance Universe profile: Developing World Markets (DWM), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Developing+World+Markets+(DWM)
MicroCapital’s Microfinance Universe profile: Unitus Capital, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Unitus+Capital
Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/
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