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JM Financial India Fund, a private equity fund sponsored by JM Financial, an Indian financial services firm, and Old Lane Partners, a New York based hedge fund, will invest Rs40 crore (USD 10 million) in Spandana, a microfinance company based in Hyderabad, Andhra Pradesh.

According to a JM Financial release, the investment would be used to expand Spandana’s branch network and pursue growth opportunities, both organically and through acquisitions.
Continue reading “MICROCAPITAL STORY: JM Financial India Fund in Conjunction with Old Lane Partners Invests USD 10 million into Spandana Microfinance Institution”

The National Housing Bank (NHB) of India has initiated plans to partner up with established microfinance institutions (MFIs) in order to encompass low-cost rural housing into the mainstream housing finance market.

According its website, the NHB, established under an act of the Parliament, was created in 1988 with a primary purpose to function as the principal agency to promote Housing Finance Institutions (HFIs). They are empowered to issue directions to housing finance institutions to ensure their growth, make loans and advances to scheduled banks and HFIs, and formulate schemes for the purpose of mobilization of resources and extension of credit for housing.
Continue reading “MICROCAPITAL STORY: The National Housing Bank of India Incorporates Microfinance in order to Expand Market for Housing Microcredit”

Continue reading “NEWS WIRE: FINO Adopts Gemalto Smartcards to Accelerate Microbanking Deployment in India”

Udyogini Business School opened in January 2007 in a drought-prone village in Maharashtra State in India. It is the country’s first and only business school for unlettered rural women—no educational degree of any kind is required for admittance. According to the Asia Sentinel, an English-language newspaper reporting on Asia, the institution is designed to allow greater number of poor women to participate in microcredit by coaching them in entrepreneurship, accountancy, bank finance, marketing skills, and confidence-building. It also offers a wide variety of courses on how to run enterprises in areas such as purse and bag making, photography, screen-printing and mobile telephony kiosks.

Continue reading “MICROCAPITAL STORY: Mann Deshi Mahila Sahakari Bank and HSBC Sponsor Udyogini Business School for Rural Indian Women Promoting Microfinance”

Continue reading “NEWS WIRE: India’s National Housing Bank (NHB) Plans to Structure Loans”

Communities surrounding the Ajanta and Ellora Caves of Aurangabad, India will soon welcome a microfinance initiative of the JBIC, a government-run bank founded in 1999 by the Export-Import Bank of Japan. The bank will work through the nation’s Central Government in order establish a microfinance program with the Maharashtra Tourism Development Corp. (MTDC), an Indian government-owned company. The business endeavor is scheduled to begin at the end of this year.

Continue reading “MICROCAPITAL STORY: Japan Bank for International Cooperation (JBIC) Plans Microfinance Scheme for Indian Communities”

The Economic Times, a division of the India Times, reports on the strength of the Indian microfinance industry, and its possible innovative role in the supply chain. Large companies like SHARE Microfin Limited, SKS, Basix and Spandana maintain vast customer networks. According to the MIX Market, the microfinance information clearinghouse, SHARE has 826,517 active borrowers, while SKS has 513,108. Basix reports 198,282 active borrowers, and Spandana, 916,261. Driven by the power of private equity investment, these companies hope to expand in the near future to over 5 million customers apiece. As reported by the Microcapital Monitor, in March of this year SKS received a private equity investment from Sequoia (a US-based private equity fund) and Unitus (a global microfinance accelerator) of USD 11.5 mn. To date, this had been the largest ever private equity investment in Indian microfinance. However, it was soon eclipsed by a USD 27 mn private investment to SHARE by Legatum (an international investment group) and Aavishkaar Goodwell (an India-based for-profit business development company). Although these insitutions aim to increase their reach in the interest of profit, this broad web of microloan consumers could be tapped for peddling insurance, money transfer, procurement and supply chain financing for agricultural and allied activities.

Continue reading “MICROCAPITAL STORY: Indian Microfinance Industry to Expand Outreach, Products, and Services”

Calcutta: Three public sector banks — Union Bank of India, Indian Bank and Corporation Bank — and the Life Insurance Corporation have picked up a 30 per cent stake in Financial Information Network & Operations Ltd (Fino) for about Rs 35 crore. Fino provides cost-effective technology solutions to help banks and insurance companies garner business from remote areas without setting up branches or ATMs.

Development Credit Bank (DCB), an Indian private sector bank, is creating its own microfinance business with the help of the Aga Khan Development Network (AKDN), the manager of a network of ten microfinance institutions (MFIs). DCB is seeking to increase its financing of agricultural loans. The Reserve Bank of India (RBI), the nation’s central bank, requires that 40 percent of the advances of the DCB be used for what are known as “priority sectors” (see Business Standard), which include the mentioned loan type. DCB is currently below the requirement, with 32.73 percent lent within priority sectors.

Continue reading “MICROCAPITAL STORY: India’s Development Credit Bank (DCB)Partners with the Aga Khan Development Network’s (AKDN) Aga Khan Agency for Microfinance (AKAM)”

Mumbai, May 28: Buoyed by the growing success of micro-finance movement in the country, National Bank for Agriculture and Rural Development (NABARD) has proposed to set up an institution for this purpose which would have a corpus of Rs 500 crore in three years.

The micro-finance institution, to be set up on a pilot basis, is aimed at providing easy credit to needy farmers who are now at the mercy of local money lenders. “I intend to start a micro-finance institution with the approval of my Board. Its a pilot project, initially the investment will not be very high but it will reach Rs 500 crore in three years,” NABARD Chairman Y S P Thorat said.

Madison, WI—Seated in front of a camera in Madison, Wisconsin, for the Digital Video Conference on Self-help Groups in India, Pete Crear, President and CEO of World Council of Credit Unions (WOCCU), shared insights from the US credit union experience in microfinance with Indian counterparts gathered in Chennai, India.

To date, microfinance in India has been focused almost exclusively on the provision of microcredit. As in other parts of the world, people there are recognizing that the poor need access to more than credit to work their way out of poverty.