MICROCAPITAL BRIEF: BIO, Oikocredit Invest $8.3 million in Fusion Microfinance of India

Fusion Microfinance (Fusion), a microfinance institution (MFI) based in New Delhi, has received a combined investment of INR 53 crores (USD 8.28 million) from Belgian Investment Company for Developing Countries SA (BIO), an investment company backed by the government of Belgium; and the Dutch cooperative investment fund Oikocredit. The investment was made by the two organizations during Fusion’s “Series C” round of capital raise and it was split on a 50:50 basis between BIO and Oikocredit.

Fusion, which serves women primarily in rural and semi-urban environments, will use the funds to continue to expand in north-central India. The organization will also aim to seek targets for acquisition in the financial services sector.

Commenting on the transaction, David Woods, Oikocredit’s managing director, said that “Fusion’s focus on expansion in rural underserved areas is in line with our mission to reach financially excluded individuals and low-income communities”[1].

As of 2013, Fusion had a gross loan portfolio of USD 22.9 million with an average loan balance per borrower of USD 179.8. The organization also reported approximately 128,000 active borrowers, USD 23.9 million in assets, return on equity of 8.39 percent and return on assets of 2.82 percent. As of 2013, BIO reported a portfolio value of EUR 373.9 million (USD 474.3 million) and total new commitments of EUR 124.5 million (USD 158 million) during that year. As of 2014, Oikocredit reported total assets of EUR 907 million (USD 1.21 billion) and 805 active investors, 589 of which were MFIs.

By Mathew Cerf, Research Associate

About Fusion Microfinance Private Limited

Fusion Microfinance Private Limited is a non-banking financial company that was founded in 2010. The organization is headquartered in New Delhi and it offers microfinance services in north-central India. During its first year of existence, Fusion acquired the microfinance division of Aajeevika, an Indian nonprofit. The organization’s vision is “to provide underprivileged women with economic opportunities.” Fusion offers life insurance and microcredit services. Its microloans range in value from INR 12,000 (USD 220) to INR 30,000 (USD 551). The duration of the loans range from 1.5 to 2 years and are distributed through a network of 61 branches. As of March 2015, Fusion reported approximately 212,000 active borrowers, a gross loan portfolio of INR 619 crores (USD 97.2 million), and 61 branches in 5 states in India. In December 2013, Fusion reported to the US-based nonprofit Microfinance Information Exchange (MIX) return on assets (ROA) of 2.82 percent and return on equity of 8.39 percent. The organization does not accept deposits.

About Belgian Investment Company for Developing Countries SA (BIO)

The Belgian Investment Company for Developing Countries, also known its Dutch acronym BIO, was established in 2001 by the Belgian government in an effort to promote the creation of a strong private sector in developing countries to enable them to achieve prosperity through sustainable development. As of 2013, BIO’s portfolio included 132 projects. As of 2013, BIO reported a portfolio value of EUR 373.9 million (USD 474.3 million) and total new commitments of EUR 124.5 million (USD 158 million).

About Oikocredit

Oikocredit is a Dutch cooperative investment fund comprised of church groups, cooperatives and individual investors. Established in 1975, it works in 70 countries, investing mainly in microfinance institutions (MFIs) as well as trade cooperatives, fair trade organizations and small and medium-sized enterprises (SMEs) in the developing world. As of 2014, Oikocredit reported total assets of EUR 907 million (USD 1.21 billion) and 805 active investors, 589 of which were MFIs.

Sources and Additional Resources

[1] Information Provided to MicroCapital by Fusion Microfinance Press Release, “BIO and Oikocredit invest INR 53 crores in Fusion Microfinance”

[2] Information provided to MicroCapital by Incofin Investment Management, June 24, 2015

[3] Microfinance Information Exchange (MIX), “Fusion Microfinance,” http://www.mixmarket.org/mfi/fusion-microfinance

[4] Oikocredit, “2014 Annual Report”, http://www.oikocredit.coop/publications/annual-reports

[5] MicroCapital Universe Profile, “Fusion Microfinance Private Limited,” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Fusion+Microfinance+Private+Limited

[6] MicroCapital Universe Profile, “Belgian Investment Company for Developing Countries SA (BIO)” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Belgian+Investment+Company+for+Developing+Countries+%28BIO%29

[7] MicroCapital Universe Profile, “Oikocredit,” https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Oikocredit

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