by Stefanie Rubin -

MICROCAPITAL BRIEF: Microfinance Insights Releases Report, “Is Information and Communication Technology Fueling the Growth of Microfinance?”

Microfinance Insights, a publication produced by the social-sector advisory firm Intellecap, recently released a survey report titled, “Is Information and Communication Technology Fueling the Growth of Microfinance?”

by Stefanie Rubin -

MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Invest $15m in Aavishkaar Goodwell Fund for Microfinance

Aavishkaar Goodwell India Microfinance Development Company Ltd, a microfinance focused private equity firm, has secured a USD 15 million commitment from the International Finance Corporation (IFC), the private investment arm of the World Bank, for its second fund.

by Christopher Maggio -

MICROCAPITAL BRIEF: Aavishkaar Goodwell, Company Providing Equity Finance for Microfinance Institutions (MFIs), Seeks to Raise USD 100 Million for Second Fund

Aavishkaar Goodwell, a company that provides equity finance for microfinance institutions (MFIs), is attempting to secure commitments to raise USD 100 million for its second fund.

by Christopher Maggio -

MICROCAPITAL.ORG BRIEF: Bhartiya Samruddhi Finance Ltd to Raise USD 20-25 Million in Equity Capital

The India-based microfinance institution (MFI), Bhartiya Samruddhi Finance Ltd, which is part of BASIX, a group of companies that participate in microfinance and other services to the poor, is planning to raise USD 20 to 25 million in equity capital in the next two to three weeks [1,2,3]. This comes after Bhartiya Samruddhi raised USD 9.87 million in equity capital in April of 2009 [1]. This investment was covered by Microcapital and investors included Lok Capital LLC, Aavishkaar Goodwell India Microfinance Development Company, and Small Industries Development Bank of India (SIDBI) [4]. S Ramachandran, Bhartiya Samruddhi’s Chief Financial Officer, has stated that the MFI is “in talks with mainstream [private equity] players” [1]. He has also stated that the MFI may turn to raising debt after this round of equity capital, and may raise even more equity in June [1]. Intellectual Capital Advisory Services (Intellecap), “a social-sector advisory firm” that advised the last round of equity capital for Bhartiya Samruddhi, will advise the coming round as well [1,5].

by Diya Chopra -

MICROCAPITAL.ORG STORY: Indian Microfinance Sector Sees Increase in Private Equity Investments from $61m to $143m

The Financial Express, a web-based Indian financial news source, said that from January to October of 2009, the Indian microfinance sector has seen a significant growth in private equity (PE) investments. In that time period, eleven PE deals worth USD 143 million were carried out, compared to eight deals worth USD 61 million in the previous year. According to the article, the Indian microfinance sector’s compound annual growth rate (CAGR) has reached 105% [1].

by Stefanie Rubin -

WHO’S WHO IN MICROFINANCE: The Microfinance Gateway (www.microfinancegateway.org), Provided by World Bank’s Consultative Group to Assist the Poor (CGAP)

Launched in 2000, the Microfinance Gateway is self-proclaimed as “the most comprehensive online resource for the global microfinance community,” getting over four million page hits from 200 countries in 2008. The website is provided by the microfinance arm of the World Bank, the Consultative Group to Assist the Poor (CGAP), in an effort to advance knowledge and encourage innovation within the microfinance industry [1]. In May of this year, the site was re-launched, with interactive features such as ratings, reviews and comment boards. Also among the additions are “Hot Topic” pages with relevant links and overviews for microfinance-related investment, rural and agricultural finance, social performance, microinsurance, savings, technology and more. In an effort to further improve the site, CGAP has released the Microfinance Gateway User Survey 2009, which asks users to rate and comment on new features including accessibility, breadth and depth of information, job postings and the “attractiveness” of the new user interface [2].

by Chinq Yee Chong -

MICROCAPITAL.ORG STORY: Is The Microfinance Sector Losing Its Appeal To Investors As A Result Of High Valuations?

In a report by the Hindu Business Line entitled ‘Microfinance sector losing sheen due to high valuations’ [1], reporter Mr Sagar Bhadra observes that the microfinance sector, which he stated accounted for 40 percent of all private equity transactions in India in the last 18 months, ‘seems to have lost its charm’. Valuations in the sector have ‘skyrocketed’ with the consequence that ‘investors now fear a bubble and are approaching the sector cautiously’. Some market participants feel that investments in the sector is likely to decrease as investors become more selective, particularly when funding start-up MFI, according to Mr Anurag Agrawal, Senior Vice-President of Intellecap [2], a social investment advisory firm. Mr Agrawal added that the secondary market for MFI investments will start to pick up as existing investors start looking for exits.

by Sally Levy -

MICROCAPITAL STORY: Microfinance Insights Offering Free 1 Year E-subscription until June 30, 2009

Microfinance Insights, published bimonthly by Intellecap, is a print and online resource for those working in the microfinance sector.  It has a global readership of over 10,000 across 150 countries and provides the latest news, trends and analysis that is current and global in focus.

by Sally Levy -

MICROCAPITAL STORY: Sahara Mutual Fund of India Launches Systematic Investment Plan (SIP) as a Microfinance Saving Scheme

Sahara Mutual Fund (SMF), an asset management company, has lodged a draft offer document with the Securities and Exchange Board of India (SEBI) to create the Sahara Daily Fund (SDF). The SDF will be a daily systematic investment plan (SIP) where people can invest with a minimum of 10 Indian Rupees (Rs.) (USD 0.20). The SDF is aimed at providing daily wage earners with a microfinance saving scheme. Units are purchased and can be traded on any business day. There will be a dividend option (payout or reinvestment) and a growth option. Dividends will be distributed, subject to profits being available, based on the units held by the account holder.

by Laura Anderson -

MICROCAPITAL STORY: 85 Percent of Microfinance Institutions (MFIs) and 61 Percent of Microfinance Investors Say MFIs Should Offer More than Financial Services According to Microfinance Insights Survey

A new survey of 150 microfinance institutions and investors conducted by Microfinance Insights, an international print magazine published by Intellecap, shows that 85 percent of microfinance institutions (MFIs) and 61 Percent of microfinance investors say MFIs should offer more than financial services.  Of the MFIs polled, 79 percent offer “products and services that are consciously seeking to create social impact beyond simple financial inclusion,” including 63 percent that offer community development, 60 percent that seek inclusion of minorities, and 53 percent that offer better employment and labor conditions.  Over 83 percent of the MFIs polled said their primary goal was poverty alleviation and 78 percent stated their main objective was women’s empowerment.  Complete survey results can be found in the May/Jun 2009 issue of Microfinance Insights which can be purchased at www.microfinanceinsights.com/magazine_index.asp.

by Goda Thangada -

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.”

by Diana Yang -

MICROFINANCE EVENT: Engineers for Social Impact (E4SI) 2009 Fellowship Program

APPLICATIONS BECOME AVAILABLE ONLINE ON JANUARY 15, 2009 AND ARE DUE BY FEBRUARY 22, 2009.

Engineers for Social Impact (E4SI) has commenced its second annual rigorous recruitment process to match the most talented ten undergraduate students from fifteen elite Indian engineering schools with partner social enterprises that focus on development by means of sustainable for-profit entrepreneurship. E4SI fellowships promise to be highly entrepreneurial in a way that combines the best of consulting, technology, and social innovation. Fellows will gain unprecedented access to the development sector as they work with leading social entrepreneurs, attend leadership workshops at the Indian School of Business (ISB), Hyderabad, and pitch their ideas to thought leaders as they join an outstanding cohort of exceptional young leaders.

Partner social enterprises for the 2009 edition of the E4SI fellowship program are leaders in microfinance, multiple bottom-line investment advisory, education, energy, and healthcare. Among them are: Ujjivan, Intelicap, iDiscoveri, and Solar Electric Light Company (SELCO India).

For more information on the Engineers for Social Impact fellowship and details on how to apply for the 2009 edition, please visit the E4SI website. Applications are due on February 22, 2009.

by Scott Everett -

MICROCAPITAL STORY: Microsoft & IBM Target Microfinance for Social and Capital Returns

Increasingly, some of the world’s largest technology companies are looking toward the developing world for both clients and innovation opportunities. Intellecap, a social business advisory firm, recently published interviews with IBM and Microsoft in its bi-monthly magazine Microfinance Insights; the interviews discuss the companies’ involvement in the microfinance sector. C.K. Prahalad, Professor of Corporate Strategy at the University of Michigan Ross School of Business said “I believe that the companies that are clued in [to this market] will have enormous benefits, and will take that knowledge back to the rest of the world. To me, the base of the pyramid is not just an opportunity for market expansion…it is an opportunity for innovation.”