In May 2009, Bellwether Microfinance Fund, a private equity fund based in Hyderabad, India, reported a USD 479,600 equity investment in Equitas Micro Finance India, a Chennai based microfinance institution (MFI), to the CGAP Microfinance Dealbook, the monthly report on microfinance market transactions. The deal was denominated in local currency. MicroCapital has reported on a May 2009 USD 3.7 million investment by MicroVentures in Equitas as well as a securitization worth USD 3.0 million in March 2009.
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NEWS WIRE: India: Banks Building Innovative Distribution Channels Through Microfinance Institutions to Reach the Bottom of the Pyramid
Source: Outlook Business (India).
MICROCAPITAL STORY: Share Microfin Seeks to Raise USD 50 Million From International Finance Corporation (IFC) and Others
SHARE Microfin, a microfinance institution (MFI) based in Hyderabad, India, has announced that it intends to raise USD 50 million in equity funding. According to the press release on VCCircle, the International Finance Corporation (IFC) is considering investing, and the MFI is currently in talks with other investors. If the transaction proceeds it will be one of the biggest Indian microfinance transactions after SKS Microfinance‘s USD 75 million deal in November last year. To read a MicroCapital story about that deal, click here. With the funding, SHARE will expand in states such as Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Uttranchal, and West Bengal. No other information regarding the deal or potential investors was available at the time of this release.
MICROCAPITAL STORY: Bhartiya Samruddhi Finance Ltd, a Unit of BASIX Group, Raises USD 9.87m in Capital
A recent press release from Intellectual Capital Advisory Services (Intellecap) reports that Bhartiya Samruddhi Finance Ltd (BSFL), a microfinance institution (MFI) based in Hyderabad, India, has received USD 9.87 million in Series-B funding from several investors including Lok Capital LLC, Aavishkaar Goodwell India Microfinance Development Company and Small Industries Development Bank of India (SIDBI). Intellecap, a finance consultancy firm, was BSFL’s advisor on the deal. BSFL’s old investors, including IFC, Shorecap International Ltd, and ICICI Bank, commenced their exit by making a secondary sale of USD 4 million to the new investors. According to Aavishkaar Goodwell, USD 500 million in private equity over the next five years is necessary to facilitate the growth of MFIs in India. BSFL was set up in 1997 by Bhartiya Samruddhi Investments and Consulting Services (BASICS), the holding company of the BASIX group. BASICS currently owns 49.5 percent of BSFL, with investors holding the remaining amount. According to Mr. Vijay Mahajan, the Chairman and CEO of BSFL, “This is a big milestone for us as investors have reposed faith in the BASIX integrated livelihood promotion model over cookie-cutter micro-credit. We are all set to now address our goal of reaching 10 million poor households by 2014.” Donald Peck, the co-founder of Lok Capital, remarked, “We are delighted to be able to support the further growth of BSFL as it embarks on the next stage of roll-out of its unique agriculture and skills focused business models.”
MICROCAPITAL PAPER WRAP-UP: How Does Credit Access Affect Children’s Time Allocation? Evidence From Rural India, by Nobuhiko Fuwa, Seiro Ito, Kensuke Kubo, Takashi Kurosaki, and Yasuyuki Sawada
Written by Nobuhiko Fuwa, Seiro Ito, Kensuke Kubo, Takashi Kurosaki, and Yasuyuki Sawada, and released January 2009 as Discussion Paper No. 183 by the Institute for Developing Economies (IDE), 23 pages, full text available at: http://www.microfinancegateway.org/files/56716_file_ARRIDE_Discussion_No.183_kubo.pdf
In “How Does Credit Access Affect Children’s Time Allocation? Evidence From Rural India”, the authors seek to quantitatively analyze the effect of credit access on the amount of time allocated by children to leisure, work, and school. This preliminary discussion paper was published by the Institute of Developing Economies (IDE), a semigovernmental research organization that merged with the Japanese External Trade Organization in 1998. This study was conducted in the Kurnool district of Andhra Pradesh, where the child labor rate is unusually high at 54.2 percent.
PAPER WRAP-UP: A Closer Look at Consolidation: The Sonata-Jeevika Acquisition, by Akhand Tiwari and Michael Chasnow
Akhand Tiwari and Michael Chasnow, IFMR Centre for Microfinance’s co-authors, provide an in-depth look at an acquisition in Indian microfinance: Sonata Finance’s purchase of Jeevika Livelihood Support Organization’s microfinance operation in August 2007. The Institute for Financial Management and Research (IFMR) Centre for Microfinance was established in 2005 with the objective to improve the accessibility and quality of financial services for the poor through research, knowledge dissemination and evidence-based policy for MFIs. This paper explores the acquisition and insights it may have for other microfinance practitioners.
MICROCAPITAL STORY: SKS Microfinance, Madura Micro Finance and Grama Vidiyal to Offer Home Loans in India
According to a report in The Times of India, three Indian MFIs will begin offering home loan products to the rural poor. SKS Microfinance, Madura Micro Finance and Grama Vidiyal all plan to start rolling out home loans and home improvement loans to borrowers with good repayment records. According to Tara Thiagarajan, Chairman of Madura Micro Finance, the low cost construction model used by the rural poor has prompted the MFIs to offer the loans. Most people in Indian villages own plots and construct their own homes using indigenous materials.
MICROCAPITAL STORY: Indian SKS Microfinance Teams Up with Mobile Phone Vendors Nokia and Bharti Airtel to Provide Service for Rural Customers
Microfinance institutions are teaming up with leading mobile phone makers to offer cheaper handsets customized for rural customers, according to a news report from the Indian Economic Times. The report also noted that Nokia, the world leading mobile phone supplier, is running a pilot project to sell handsets in the Andhra Pradesh state through SKS Microfinance, a non-banking finance company. Likewise, Nokia is about to launch mobile information services revolving around agriculture, education, and entertainment in the rural state of Maharashtra, in addition to partnering with a host of existing content providers to deliver information on seed, fertilizer, and pesticide costs, prevailing market prices for crops, and weather.
WHO’S WHO IN MICROFINANCE: Vikram Akula
Vikram Akula is the founder and chairperson of SKS Microfinance Private Ltd., a microfinance organization which provides loans to women in the poorest regions of India. SKS Microfinance was started in 1997 by Mr. Akula with a mission to empower the poor to become economically self-reliant through the provision of financial services in a sustainable manner.
MICROCAPITAL STORY: Indian Bank Launches The Latest Of Its Rural Development Initiatives, Financial Literacy and Credit Counselling Centres (FLCC) and Micro State Branches, to Support Microfinance
Indian Bank, a Government-owned banking institution, has established the first of its Financial Literacy and Credit Counselling Centres (FLCC) in Dharmapuri, one of the 32 districts in Tamil Nadu on the Southeast coast of India. The FLCCs are being established under the umbrella of the newly created Indian Bank Trust for Rural Development (IBTRD). FLCCs will provide information on various financial products and services and advice on managing debt and finances as well as helping people to understand their rights and responsibilities with regards to finances. A proposed second FLCC may open in Puducherry a Union Territory bordering Tamil Nadu. The FLCCs will provide information at no charge to the client. Additionally, training institutes entitled Indian Bank Self Employment Training Institute will be established under the IBTRD in Andhra Pradesh, Tamil Nadu and Puducherry.
MICROCAPITAL STORY: IDBI Fortis Life Insurance Launches Group Microinsurance Plan; Samhita Community Development Services (SCDS) Become the First Policyholders
IDBI Fortis Life Insurance Co. Ltd., a relatively new Indian private life insurance company, has launched a new Group Microinsurance Plan. The plan provides affordable life insurance coverage to groups such as microfinance institutions (MFIs), self help groups (SHGs), and non-governmental organizations (NGOs). The plan insures the lives of the group members as well as provides protection from loan liabilities in the case of death of the primary earner of the family.
NEWS WIRE: Social Entrepreneurs Turn Business Sense to Good
Source: Business Week.
NEWS WIRE: India: Indian Microfinance Grows Fast But Without Purpose
Source: Business Today.
MICROCAPITAL STORY: Nirantara Community Services, Arohan, and Sanghamithra Rural Financial Services Win National Awards at the PlaNet Finance India’s 2008 Microfinance Process Excellence Awards
The nineteen awardees of the Royal Bank of Scotland and PlaNet Finance India’s Microfinance Process Excellence Awards were announced recently at a conference in Delhi. They were the third annual awards and the winners for the awards were selected from a pool of 67 nominees, which were shortlisted after receiving applications from the initial pool of applicants. The award winners were announced at the Microfinance India Summit 2008, held Nov. 11th to 13th in New Delhi. National winners for the three categories of awards were Nirantara Community Services, Arohan, and Sanghamithra.
MICROCAPITAL STORY: Indian Microfinance Org Cashpor Adopts ClassifEye Secure Mobile Transactions Solution
ClassifEye, a developer of secure fingerprint authentication technology, announced that Cashpor India, an Indian microfinance institution (MFI), has adopted ClassifEye’s camera-phone-based transactions and authentication solution. Casphor hopes to broaden its customer base and allow their agent-serviced customers to improve their financial reach. Cashpor India is piloting the service in parts of Uttar Pradesh and Bihar.
PIONEERS IN MICROFINANCE: Five Asian Pioneers: Mechai Viravaidya of Thailand, Anton Soedjarwo of Indonesia, Vijay Mahajan of India, Bambang Ismawan of Indonesia, and Karunawathie Menike of Sri Lanka
Microcapital has identified the following five Asian microfinance “pioneers,” individuals who have made long-standing contributions to the evolution and promotion of microfinance practices and/or technology in Asia: Mechai Viravaidya of Thailand, Anton Soedjarwo of Indonesia, Vijay Mahajan of India, Bambang Ismawan of Indonesia, and Karunawathie Menike of Sri Lanka. Below are short descriptons of the contributions of each:
NEWS WIRE: India: MFIs Face Challenge of Global Meltdown
Source: The Economic Times.
TECHNOLOGY FOCUS: Rural users yet to take a call on mobile banking
SOURCE: Business Standard
Original story available here.
Mobile banking (m-banking) in India, viewed by the government as a potent tool for financial inclusion, is yet to clear many hurdles before it can fulfil its objective of reaching the unbanked masses. Primarily so, say analysts, since the mobile density in tier II and III cities, is 11 percent and 10 percent respectively.