MICROCAPITAL BRIEF: Indian Microfinance Institution (MFI) Janalakshmi Raises $23.5m through Non-Convertible Debentures, Borrows $4.2m from IFMR Capital

Janalakshmi Financial Services, a Bangalore-based microfinance institution (MFI) that offers lending and insurance services to low-income households in India, recently announced that it had raised a total of INR 1.77 billion (approximately USD 27.7 million) through the issuance of non-convertible debentures (NCDs) and an unsecured term loan.

An unnamed mutual fund invested INR 1.5 billion (approximately USD 23.5 million) in the senior secured NCDs. The organisation raised a further INR 270 million (approximately USD 4.2 million) through an unsecured term loan from IFMR Capital, an affiliate of the Chennai-based nonprofit Institute of Financial Management and Research that facilitates funding for organisations that serve low-income households.

 

V. S. Radhakriahan, the chief executive officer of Janalakshmi, said that “this is the largest single investor subscription to NCDs issued by Janalakshmi. Most microfinance institutions are primarily funded by banks and private equity players and it is therefore critical for MFIs to diversify their sources of funding”[1].

 

As of 2014, Janalakshmi reported total assets of USD 420 million, a gross loan portfolio of USD 342 million outstanding to 1.4 million borrowers, return on assets of 3.66 percent and return on equity of 19.54 percent. The MFI does not accept deposits. As of 2013, IFMR Capital reported INR 1.8 billion in total assets (approximately USD 34 million).

 

 

By Victor Mugo, Research Associate

 

About Janalakshmi Financial Services

Janalakshmi Financial Services is a microfinance institution (MFI) located in Bangalore, India. It is focused primarily on offerring loans and microinsurance to low-income populations in urban areas of India. As of 2014, Janalakshmi reported to the US-based non-profit Microfinamce Information Exchange (MIX) total assets of USD 420 million, a gross loan portfolio of USD 342 million outstanding to 1.4 million borrowers, return on assets of 3.66 percent and return on equity of 19.54 percent. The MFI does not accept deposits.

 

About IFMR Capital

IFMR Capital, a subsidiary of IFMR Trust, is an Indian non-banking financial company that aims to provide liquidity and debt capital to the microfinance industry and other sectors that offer products and services to low-income households. IFMR Trust is an affiliate of the Institute for Financial Management and Research (IFMR), a non-rofit research and educational institution in India. As of 2013, IFMR Capital reported INR 1.8 billion in total assets (approximately USD 34 million). Further financial information on IFMR Capital is not available.

 

Sources and additional information

 

[1] VCCircle News: Microfinance Firm Janalakshmi Raises $28m through NCD’s, unsecured Loan

http://www.vccircle.com/news/micro-finance/2015/08/11/microfinance-firm-janalakshmi-raises-28m-through-ncds-unsecured-loan

 

[2] MicroCapital Universe Profile: Janalakshmi Financial Services

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Janalakshmi+Financial+Services+%28JFS%29

 

[3] MicroCapital Universe Profile: IFMR Capital

https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=IFMR+Capital

 

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