MICROCAPITAL BRIEF: ACCION International Issues Credit Guarantees Totaling $1.5m to Indian Microfinance Institutions (MFIs) Swadhaar FinServe, Saija

ACCION International (ACCION), a private, US-based nonprofit organization with a global network of microfinance institutions (MFIs), recently issued two standby letters of credit (SBLC) totaling USD 1.5 million for two of its Indian partner microfinance institutions (MFIs) to secure loan facilities. ACCION issued a USD 1 million SBLC for Swadhaar FinServe Private Limited (Swadhaar), an MFI based in Mumbai, to underwrite a 24-month loan facility of INR 50 million (USD 1.11 million), extended by India’s Ratnakar Bank Limited. In a separate transaction, ACCION issued a USD 500,000 SBLC for Saija Finance Private Limited (Saija), an MFI based in Bihar, to secure a 35-month INR 30 million (USD 663,000) loan facility extended by State Bank of India. Veena Mankar, CEO of Swadhaar, exclaimed that “these lines of credit are critical to meeting demand”.  The loans are significant since credit markets in India have tightened in response to the turmoil in the microfinance industry in the Indian state of Andhra Pradesh that began late in 2010 [2].

In 2009, Swadhaar FinServe reported to the US-based data provider Microfinance Information Exchange (MIX) a gross loan portfolio of USD 4.4 million, total assets of USD 6.3 million and 27,400 active borrowers. In 2009, Saija reported in its financial statements a gross loan portfolio equivalent to USD 257,000 and 2,900 borrowers.

By Jacqueline Foelster, Research Associate

About ACCION International: ACCION International is a private, US-based nonprofit organization with the mission of alleviating poverty by providing financial products such as microenterprise loans, business training and other financial services to its clients. ACCION was founded in 1961 and issued its first microloan in 1973 in Brazil. ACCION’s partner microfinance institutions provide loans to men and women entrepreneurs in 23 countries in Latin America, Asia, Africa and the United States. As of 2009, ACCION’s network serves 3.3 million active clients and has an aggregated gross loan portfolio of USD 31.8 billion.

About Swadhaar FinServe Private Limited (Swadhaar FinServe): Based in Mumbai, India, Swadhaar FinServe provides microcredit and microinsurance services to low-income groups. According to the Microfinance Information Exchange (MIX), the US-based nonprofit data provider, Swadhaar Finserve reported a gross loan portfolio of USD 4.4 million, total assets of USD 6.3 million and 27,391 active borrowers as of 2009.

About Saija Private Limited (Saija): Founded in April 2008, Saija aims to offer financial services in the Indian states of Bihar, Jharkhand, Delhi, Rajasthan, Chhattisgarh and parts of Uttar Pradesh and Madhya Pradesh. Saija does not report to the Microfinance Information Exchange (MIX), the US-based nonprofit data provider. In 2009, Saija reported in its financial statements a gross portfolio equivalent to USD 256,597 and 2,860 borrowers.

Sources and resources:

[1] ACCION International Press Release, “ACCION Extends Microfinance Guarantee Funds to South Asia”, http://www.accion.org/Page.aspx?pid=2242

[2] MicroCapital.org Brief, November 15, 2010: India’s Microfinance Industry on Brink of “Collapse” Due to Credit Freeze in State of Andhra Pradesh, https://www.microcapital.org/microcapital-brief-indias-microfinance-industry-on-brink-of-collapse-due-to-credit-freeze-in-state-of-andhra-pradesh/

MicroCapital.or Brief, November 1, 2010, “MicroVentures Lends $680,000 to Indian Microfinance Institutions (MFI) Swadhaar Finserve”, https://www.microcapital.org/microcapital-brief-microventures-lends-680000-to-indian-microfinance-institution-mfi-swadhaar-finserve/

MicroCapital.org Brief, December 13, 2010, “Institute for Financial Management Research Mezzanine Finance Private Limited (IFMR Mezz) Provides $221k in Subordinated Debt to Saija Finance Private Limited”, https://www.microcapital.org/microcapital-brief-institute-for-financial-management-research-mezzanine-finance-private-limited-ifmr-mezz-provides-221k-in-subordianted-debt-to-saija-finance-private-limited/

MicroCapital Microfinance Universe Profile: ACCION, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACCION+International

MicroCapital Microfinance Universe Profile: Swadhaar FinServe, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Swadhaar+FinServe+Private+Limited

MicroCapital Microfinance Universe Profile: Saija Finance Private Limited Limited, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Saija+Finance+Private+Limited

Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/

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