MICROCAPITAL BRIEF: Grameen Capital India Raises Undisclosed Sum to Loan to Social Enterprises

Grameen Capital India, a Mumbai-based social business, recently raised fresh investment funds to provide debt finance for social enterprises in India from new investors including Ratan Tata, the former chairman of the India-based conglomerate Tata Group; Shrinivas Dempo, the chairman of Indian mining company Dempo Group; and Indian investment banker Vikram Gandhi. This is in addition to additional funds sourced from existing investors, the US-based nonprofit organization Grameen Foundation and two individual Indian investors, Amit Patni and Arihant Patni [1]. The investment amounts were not disclosed.

Grameen Capital plans to roll out the loans during the second quarter of 2015. It will target services for people with low incomes in sectors such as financial inclusion, agriculture, health care and education.

“We are still working on the final offering. Depending upon the need, we will provide debt, which might be in the form of syndication or securitization. We will look at placing some of the paper in the main stream capital markets,” said Royston Braganza, the chief executive officer of Grameen Capital [2].

According to the press release, Grameen Capital initially planned to raise USD 10 million for this effort, and the organization is in discussions with two additional institutional investors to meet its target [1].

By Caroline Zhu, Research Associate

About Grameen Capital India

Grameen Capital India is a “social business” based in Mumbai that promotes investments from the capital markets to other social businesses. It is a collaboration between Grameen Foundation USA, India’s IFMR Trust and US-based Citigroup. Its focus is on: “Developing access to capital markets, initially in India, through securitization and other appropriate financial vehicles; structuring and arranging credit enhancements / first loss guarantees to support the investment grade rating of the senior securities… and advising microfinance institutions on the standards of governance, accounting, reporting, and transparency necessary to satisfy commercial financing sources.” Financial information on the firm is unavailable.

About Tata Group

Tata Group is a multinational conglomerate located in Mumbai, India. The company is focused on seven business sectors: communications and information technology, engineering, materials, services, energy, consumer products and chemicals. As of 2014, Tata Group reported assets of USD 116 billion.

About Grameen Foundation

The Grameen Foundation, a nonprofit based in Washington, DC, provides financial, technological and managerial support to provide new business opportunities and telecommunication services for poor people in rural areas. Though it is independent of the Grameen Bank, Dr Muhammad Yunus, the founder of the Grameen Bank, serves on the foundation’s Board of Directors. Grameen Foundation reported total revenue of USD 23.0 million and total assets of USD 17.2 million as of March 31, 2014.

Sources and Additional Resources:

[1] Grameen Capital India Press Release, “Grameen Capital taps Ratan Tata to Invest in Debt finance Unit,” http://www.grameencapital.in/images/pdf/Press_Release_GCI_nbfc.pdf

[2] Livemint.com news, “Grameen Capital taps Ratan Tata to Invest in Debt finance Unit,” http://www.livemint.com/Companies/jGLSMDKOcP7BiCH1zPATyK/Ratan-Tata-others-invest-in-Grameen-Capital-for-debt-financ.html

MicroCapital Universe Profile: Grameen Capital India

MicroCapital Universe Profile: Tata Group

MicroCapital Universe Profile: Grameen Foundation

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