MICROCAPITAL BRIEF: Indian Microfinance Institution, Basix, to Expand in Africa

Basix Group, an Indian provider of microfinance and other services to poor people since 1996, is reportedly looking to establish a footprint in Africa in order to increase earnings and diversify risk. Basix Group aims to increase fee-based revenue, as opposed to revenue such as interest rate spreads, from current levels of 40 percent to 70 percent by acquiring minority stakes in development credit institutions in 10 African countries.

After Indian microfinance regulation was tightened in late 2010, Basix recorded losses of 2 million customers and INR 600 crore (USD 114 million). Basix founder and chairman Vijay Mahajan reportedly has said Basix Group must secure INR 100 crore (USD 19 million) in equity within the next couple of months to assure that its debt restructuring proposal is approved. Basix intends to acquire no more than 26 percent of any one African bank.

As of December 2011, Basix Group reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 159 million, a gross loan portfolio of USD 155 million, approximately 1.19 million active borrowers and operations in 16 Indian states and 6 other countries. The group’s microfinance activities are carried out by two microfinance institutions (MFIs): Bhartiya Samruddhi Finance Limited (BSFL), a non-banking finance company (NBFC), and Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB), a rural bank.

By Amira Berrada, Research Associate

About Basix Group: Founded in 1996, Basix Group is an Indian entity whose member institutions provide poor people with products including microfinance, mobile payments, health insurance and agricultural and business development services. Basix Group operates through a holding company, Bhartiya Samruddhi Investments and Consulting Services Limited (BASICS). The group’s microfinance activities are carried out by two microfinance institutions (MFIs): Bhartiya Samruddhi Finance Limited (BSFL), a non-banking finance company (NBFC), and Krishna Bhima Samruddhi Local Area Bank Limited (KBSLAB), a rural bank. Basix Group also promotes Basix Academy for Building Lifelong Employability Limited, Basix Consulting and Training Services Limited, Basix Krishi Samruddhi Limited, Basix Sub-K iTransactions Limited and Ctran Consulting Limited. As of December 2011, Basix Group reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 159 million, a gross loan portfolio of USD 155 million, approximately 1.19 million active borrowers and operations in 16 Indian states and 6 other countries. As of March 2011, Basix Group reports return on assets of 0.66 percent and return on equity of 4.73 percent.

Sources and Additional Resources:

[1] The Economic Times, “Basix Group Looking to Expand Africa Footprint” http://articles.economictimes.indiatimes.com/2012-04-16/news/31349825_1_

MicroCapital story, March 23, 2012, “MICROCAPITAL BRIEF: Banks Recast Loans of $136m for Indian Microfinance Institution Bhartiya Samruddhi (Basix)” https://www.microcapital.org/microcapital-brief-banks-recast-loans-of-136

MicroCapital story, January 20, 2012, “MICROCAPITAL BRIEF: Michael and Susan Dell Foundation Takes Equity Stake in India Basix Sub-k Mobile Payments Platform” https://www.microcapital.org/michael-and-susan-dell-foundation-takes-equi

MicroCapital Universe Profile for Basix Group: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=BAS

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

 

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Amira joined MicroCapital while working at Export Development Canada (EDC) as a Credit Insurance Underwriter. Amira holds a Bachelor degree in International Business and Finance from Concordia University in Montreal. While completing her bachelor degree, Amira spent a semester in France and upon graduation, three months in India working with non-governmental agencies, political and spiritual groups for various socioeconomic initiatives such as the advancement of women. While travelling to different cities and rural areas in India, Amira was touched by the poverty she witnessed and was dedicated to finding a way to intertwine her business interests with her passion for development. She hopes this internship in microfinance will provide the framework to integrate an element of development into her professional career as well as positively contribute to the field of microfinance. Amira speaks English, French, and Spanish fluently and has conversational knowledge in Portuguese and Arabic. In her spare time, she enjoys reading, trying new restaurants such as molecular gastronomy, restaurants made out of ice and Nicaraguan meals wrapped in banana leaves. Most of all, she loves to travel with loved ones.