MICROCAPITAL BRIEF: Indian Microfinance Institution Utkarsh Raises $12m in Non-convertible Debentures from UTI International Wealth Creator 4, Microfinance Enhancement Facility, AAV Sarl

Indian microfinance institution (MFI) Utkarsh reportedly has raised INR 75.8 crore (USD 12.2 million) through the issue of non-convertible debentures (NCDs) to Mauritius-based Unit Trust of India International Wealth Creator 4, a fund of UTI Asset Management Company of India; the Microfinance Enhancement Facility (MEF), an investment vehicle founded by the World Bank’s International Finance Corporation and German development bank Kreditanstalt für Wiederaufbau (KfW); and AAV Sarl, a fund structured by Switzerland’s Symbiotics to deploy investments belonging to that firm’s clients. NCDs are financial instruments that raise funds by acquiring debt without collateral. According to a statement attributed to Mr Govind Singh, managing director and chief executive of Utkarsh, the transactions will diversify the MFI’s sources of funding and improve the distribution of dates at which its assets mature. UTI International Wealth Creator 4 and MEF were advised by Swiss investment management companies Blue Orchard Finance and responsAbility, respectively. AAV Sarl, whose name is based on the idea of an “Asian Access Vehicle” was advised by Symbiotics. The amount each organization invested is not available.

Utkarsh Micro Finance Private Limited is based in the Indian city of Varanasi and was founded in 2009. It aims to provide access to credit to poor people in the northern Indian states of Bihar, Madhya Pradesh and Uttar Pradesh. As of December 2013, Utkarsh reports managing 120 branches, 272,534 active borrowers and a loan portfolio of INR 274 crore (USD 44.1 million). As of year-end 2012, MEF holds total assets of USD 388 million and a gross loan portfolio of USD 367 million. UTI International Wealth Creator 4 and AAV Sarl do not report financial information to the Microfinance Information Exchange (MIX), a US-based nonprofit data provider, and financial information on the funds is not otherwise available.

By Meraj Husain, Research Associate

About Utkarsh Micro Finance Private Limited

Utkarsh Micro Finance Private Limited is a microfinance institution (MFI) based in the Indian city of Varanasi that was founded in 2009. It aims to provide access to credit to poor people in the northern Indian states of Bihar, Madhya Pradesh and Uttar Pradesh. As of December 2013, Utkarsh reports managing 120 branches, 272,534 active borrowers and a loan portfolio of INR 274 crores (USD 44.1 million). This institution does not accept deposits.

Sources and Additional Resources

[1] The Economic Times: “Utkarsh Microfinance raises Rs 75.8 crore through NCDs,” http://articles.economictimes.indiatimes.com/2013-12-20/news/45418137_1_aavishkaar-goodwell-microfinance-initiative-utkarsh-micro-finance

MicroCapital, April 30, 2013, “Indian Microfinance Institutions Cashpor, Utkarsh Use Technology to Improve Efficiency,” https://www.microcapital.org/microcapital-brief-indian-microfinance-institutions-cashpor-utkarsh-use-technology-to-improve-efficency/

MicroCapital, October 3, 2011, “Indian Microfinance Institution Utkarsh Raises $5m in Equity from Norwegian Microfinance Initiative, Aavishkaar Goodwell, International Financial Corporation,” https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-utkarsh-raises-5m-in-equity-from-norwegian-microfinance-initiative-aavishkaar-goodwell-international-financial-corporation/

MicroCapital, February 21, 2011, “responsAbility Social Investments of Switzerland Loans $11m to Indian Microfinance Institutions via UTI Fund,” https://www.microcapital.org/microcapital-brief-responsibility-social-investments-of-switzerland-loans-11m-to-indian-microfinance-institutions-via-uti-fund/

MicroCapital Universe Profile: Utkarsh Micro Finance Private Limited, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Utkarsh+Micro+Finance+Private+Limited

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