MICROCAPITAL BRIEF: Creation Investments Social Ventures Fund II Completes Closing with $75m, Disburses Equity Investments in Grupo Finclusion of Mexico; Sonata, Grameen Koota of India

Creation Investments Social Ventures Fund II, a US-based private equity fund managed by Creation Investments Capital Management, has completed final closing with USD 75 million in committed capital. As of May 31, 2013, the fund has disbursed approximately 35 percent of the committed capital through equity investments in Grupo Finclusion, a Mexican microfinance institution (MFI); Sonata Finance Private Limited, an Indian microfinance company registered as a non-banking finance company; and Grameen Financial Services Private Limited (GFSPL), an Indian MFI also known as Grameen Koota. The sizes of each investment and the stakes taken in each firm have not been disclosed.

As of March 31, 2013, the fund’s portfolio companies held an aggregate loan portfolio of USD 145 million and approximately 573,000 active borrowers. As of March 31, 2012, Sonata Finance reported to the US-based nonprofit microfinance information exchange total assets of USD 45.2 million and a gross loan portfolio of USD 33.4 million disbursed to approximately 191,000 borrowers. As of year-end 2011, Sonata reported return on assets (ROA) of 3.30 percent and return on equity (ROE) of 9.73 percent. As of March 31, 2012, GFSPL reported total assets of USD 99 million and a gross loan portfolio of USD 96.5 million distributed to approximately 346,000 active borrowers. As of year end 2011, GFSPL reported ROA of -1.02 percent and ROE of -5.99 percent. Financial information for Grupo Finclusion is not available.

Creation Investments Social Ventures Fund I was established in 2010 with USD 31.8 million in committed capital and disbursed the money to five MFIs in Latin America and Central and Eastern Europe. Approximately 90 percent of Fund I investors also committed money to Fund II.

By Charlotte Newman, Research Associate

About Sonata Finance Private Limited
Established in 2006, Sonata Finance Private Limited is an Indian microfinance institution with its headquarters in Allahabad, Uttar Pradesh. It offers income-generating loans, emergency loans, savings and insurance. The maximum loan size offered is INR 12,000 (USD 230) as of 2012. As of March 31, 2012, Sonata Finance reported to the US-based nonprofit microfinance information exchange total assets of USD 45.2 million and a gross loan portfolio of USD 33.4 million disbursed to approximately 191,000 borrowers. As of year-end 2011 Sonata reported return on assets (ROA) of 3.30 percent and return on equity (ROE) of 9.73 percent. Sonata does not accept deposits.

About Grameen Financial Services Private Limited (GFSPL)
Grameen Financial Services Private Limited (GFSPL), popularly known as Grameen Koota, was founded in India in 1999 as a project of nongovernmental organization T Muniswamappa Trust and has since become an independent non-banking finance company (NBFC). GFSPL operates in the Indian states of Maharashtra, Karnataka and Tamil Nadu and offers products such as microloans, vocational training loans and access to educational centers. As of September 2012, GFSPL reported total assets of USD 66 million, a gross loan portfolio of USD 63 million and 290,000 active borrowers. As of March 2012, it reported return on assets (ROA) of -1.02 percent and return on equity (ROE) of -5.99 percent. The institution does not accept deposits.

About Creation Investments Capital Management Limited Liability Corporation (LLC)
Creation Investments Capital Management LLC is an alternative investment management company whose mission is to alleviate global poverty by making direct, for-profit investments in organizations that engage in economic development. Creation Investments manages the Creation Social Ventures Fund I, which invests in microfinance institutions (MFIs) in Latin America and Europe. The company is headquartered in Chicago in the US state of Illinois. It does not report financial data to the Microfinance Information Exchange (MIX), the US-based nonprofit data provider and financial information on the company is not otherwise available. Creation Investments manages Social Ventures Fund I and Social Ventures Fund II, funds worth USD 31.8 million and USD 75 million respectively.

Sources and Additional Resources:

Information sent to MicroCapital from Creation Investments.

MicroCapital.org story, March 14, 2013, “MICROCAPITAL BRIEF: Grameen Koota of India Receives $9.8m in Equity from Incofin, Microventures, Aavishkaar Goodwell, Greation Investments; $4m in Debt Funding from Deutsche Bank Microfinance Fund,” https://www.microcapital.org/microcapital-brief-grameen-koota-of-india-receives-9-8m-in-equity-from-incofin-microventures-aavishkaar-goodwell-creation-investments-4m-in-debt-funding-from-deutsche-bank-microfinance-fund/

MicroCapital.org story, October 4, 2012, “MICROCAPITAL BRIEF: Sonata Finance of India Raises $6m in Equity from Creation Investments, Michael and Susan Dell Foundation, Individual Investors,” https://www.microcapital.org/microcapital-brief-sonata-finance-of-india-raises-6m-in-equity-from-creation-investments-michael-and-susan-dell-foundation-individual-investors/

MicroCapital Universe Profile: Sonata Finance Private Limited
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Sonata+Finance+Pvt+Ltd

MicroCapital Universe Profile: Grameen Financial Services Private Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Grameen+Financial+Services+Private+Limited

MicroCapital Universe Profile: Creation Investments Capital Management Liability Corporation
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=Creation+Investments+Capital+Management+Limited+Liability+Corporation+%28LLC%29

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