MICROCAPITAL.ORG STORY: Equitas Micro Finance India Receives $21.6m Loan from Small Industries Development Bank of India (SIDBI)

A recent article from The Economic Times stated that Equitas Micro Finance India, a microfinance institution (MFI) based in Chennai [2], received a USD 21.6 million (Rs 100 crore) loan from Small Industries Development Bank of India (SIDBI). Equitas’ Managing Director, P.N. Vasudevan, stated that the loan is repayable over four years, and that the MFI intends to raise USD 21.6 million more from other lenders. [1]

According to the MIX Market, the clearinghouse for microfinance sector data, as of 2008, Equitas has total assets of USD 61.3 million, with 339,158 active borrowers, 339,961 outstanding loans, and a gross loan portfolio of USD 43.4 million. Its return on equity is 4.02 percent and return on assets is 1.52 percent. [3]

SIDBI [4], a development bank that offers financial services to micro, small, and medium enterprises, had previously loaned USD 10.1 million (Rs 47 crore) to Equitas. Therefore, the bank’s total outstanding loans to the Equitas equals about 31.7 million (Rs. 147 crore). [1] The General Manager of SIDBI, R.M. Nair, stated that SIDBI’s portfolio has grown to total USD 5.4 billion (Rs 2500 crore). He claims that this USD 21.6 million loan to Equitas is the “single largest exposure to an MFI in the State” of Tamil Nadu. [1] There is no data available on SIDBI on the MIX Market.

By Radhika Chandrasekhar, Research Assistant

Bibliography

[1] “Equitas Micro Fin raises 100 cr from SIDBI.” The Economic Times. Oct. 13, 2009. http://economictimes.indiatimes.com/news/news-by-industry/banking/-finan…

[2] Equitas.in. http://equitas.in/

[3] Equitas Micro Finance India. MIX Market. http://www.mixmarket.org/mfi/equitas/data

[3] Bloomberg Calculator. http://www.bloomberg.com/invest//calculators/currency.html

[4] SIDBI. http://www.sidbi.in/