Frontier Investments Group, an investment vehicle of the US-based nonprofit Accion, recently announced that it, along with Saama Capital, a venture focused investment firm in India, invested a total of USD 4 million in equity in India’s Shubham Housing Development Finance Company. Shubham primarily provides mortgages and home-improvement loans to low-income Indians, particularly those in rapidly expanding urban areas. The company reportedly uses an interview-based model to assess applicants. Sanjay Chaturvedi, co-founder and CEO of Shubham stated, “At the heart of our business model is the ability to understand what our clients are genuinely able to afford, and ensuring they get the appropriate loan for a better and safer home”. According to Monica Brand, head of Accion’s Frontier Investments, “Shubham’s innovative operating model has the potential to change the way significant numbers of urban Indians live – by delivering critical financial services to self-employed, low-income people. We are thrilled to partner with a high-efficiency, forward-thinking provider who shares our vision of economic access for all.” Shubham received previous investments from Elevar Equity, with offices in the US and India, and from Helion Venture Capital of India. The investment by Saama and Frontier Investments brings Shubham’s capitalization to USD 8 million. As of 2012, Shubham has 25 branches in the following seven states: the National Capital Region [NCR], Gujarat, Rajasthan, Haryana, Maharashtra, Madhya Pradesh and Uttar Pradesh. Details such as the breakdown of the investment between the investors and the percentage stake that each will take in Shubham have not been released.
By Lena Phillips, Research Associate
About Accion’s Frontier Investments Group
Frontier Investments Group, an investment vehicle of US-based non-profit Accion, is a venture equity fund focused on microfinance. Frontier Investments invests in new technologies and business models that can enhance the way financial services are delivered to poor people by improving the efficiency, reach and scope of these services. The size of the fund is not available. As of 2011, Accion reports total assets of USD 325 million and an active loan portfolio of USD 5.5 billion serving 5.1 million borrowers.
About Saama Capital
Saama Capital is an India-focused venture capital fund that was founded in 2006 and was formerly known as SVB India Capital Partners. Based in Bangalore, India, Saama invests in entrepreneurs and ideas with the goal of creating billion dollar companies in India. The amount of money managed by the firm is unavailable.
About Shubham Housing Development Finance Company
Shubham is headquartered in Gurgaon, India, and was created by Sanjay Chaturvedi and Ajay Oak in 2010. It received a Certificate of Registration from the National Housing Bank in January 2011 and began lending operations in May 2011. Shubham deals primarily in mortgages and home-improvement loans. The company prides itself on its interview-based approach to evaluating the creditworthiness of traditionally marginalized individuals. As of 2012, Shubham has 25 branches in the following seven states: the National Capital Region [NCR], Gujarat, Rajasthan, Haryana, Maharashtra, Madhya Pradesh and Uttar Pradesh. As of November 2012, Shubham had received investments totaling USD 8 million from the following four investors: Elevar Equity, Helion Venture Capital, Saama Capital and Accion’s Frontier Investments Group.
Sources and Additional Resources:
Accion Press Release: “Accion’s Frontier Investments Group and Saama Capital Invest $4 Million in Housing Finance Company Focused on Low-income Families in India”, http://www.accion.org/accion.org/media-center/press-releases/press-release_fig-invests-in-shubham-housing-development
MicroCapital.org article, 5 July 2012: “MICROCAPITAL BRIEF: Accion to Launch $60m Frontier Investment Fund, Invest in Indian Microfinance, Other Ventures”, http://www.microcapital.org/microcapital-brief-accion-to-launch-60m-frontier-investment-fund-invest-in-indian-microfinance-other-ventures/
MicroCapital.org article, 25 June 2012: “MICROCAPITAL BRIEF: Swarna Pragati Housing Microfinance, Accion Invest $4.5m in Saija Finance of India”, http://www.microcapital.org/microcapital-brief-swarna-pragati-housing-microfinance-accion-invest-4-5m-in-saija-equity-in-finance-of-india/#more-19235
MicroCapital Universe Profile: Accion Frontier Investment Group, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACCION+Frontier+Investments+Group
MicroCapital Universe Profile: Saama Capital, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Saama+Capital
MicroCapital Universe Profile: Shubham Housing Development Finance Company, http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Shubham+Housing+Development+Finance+Company
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