MICROCAPITAL BRIEF: Indian Microfinance Institutions Trident, Bhartiya Samruddhi Finance Limited (BSFL) May Close Due to Lack of Funds

Trident Microfin Private Limited, a microfinance institution (MFI) in India, reportedly may shut down operations after being denied a loan write-down and additional funding from a forum of 21 lenders in the Indian state Andhra Pradesh. The banks denied Trident its request for a one-time loan settlement that would have allowed the MFI to pay 18 percent of its outstanding loans [1]. This comes after a downturn in the sector following a 2010 law in the state that included lengthening the loan recollection cycle and mandated that lenders get government approval for each loan disbursal.

Bhartiya Samruddhi Finance Limited (BSFL), a microfinance institution and a member of India-based Basix Group, allegedly is also facing closure after failing to meet a June 2013 deadline to raise an unspecified amount of equity.

As of September 30, 2013, Trident reported total assets of USD 24.4 million, a gross loan portfolio of USD 21.2 million and 200,000 active borrowers. As of March 31, 2013, BSFL reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 40.0 million, a gross loan portfolio of USD 46.9 million, return on assets (ROA) of -35.2 percent, return on equity (ROE) of 29.3 percent and 377,000 active borrowers.

By Megan McGowan, Research Associate

About Trident:

Trident Microfin Private Limited (formerly Annapurna Financial Services Private Limited) is a microfinance institution that was established in 2007 and is headquartered in Hyderabad, Andhra Pradesh, India. The goal of the company is to provide comprehensive financial and business solutions to enterprises and low-income individuals, particularly women and microenterprises, in a socially, economically and environmentally sustainable manner. As of September 30, 2013, Trident reported total assets of USD 24.4 million, a gross loan portfolio of USD 21.2 million and 200,000 active borrowers.

About BSFL:

Bhartiya Samruddhi Finance Limited (BSFL) is a regulated non-banking finance company (NBFC) that was founded in 1997 and is based in Hyderabad, India. It is part of the BASIX Group, which provides microfinance, agricultural and business development services to poor, rural households. As of March 31, 2013, BSFL reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 40.0 million, a gross loan portfolio of USD 46.9 million, return on assets (ROA) of -35.2 percent, return on equity (ROE) of 29.3 percent and 377,000 active borrowers.

Sources and Additional Resources

[1] Livemint: “Trident Faces Closure as Microfinance Firms Fail to Shake Off Crisis,” http://www.livemint.com/Companies/XofKGqm3kiJjS20izPmA5O/Microfinance-firm-Trident-faces-closure.html

[2] Livemint: “Microfinance Crisis Leads to Loss of 35,000 Jobs,” http://www.livemint.com/Companies/99un1M17pdKE1O6BOAB1qJ/Microfinance-crisis-leads-to-loss-of-35000-jobs.html

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

MicroCapital: “Indian Microfinance Institution Basix Sees Assets Fall from $326m to $22m,” June 11, 2012, https://www.microcapital.org/microcapital-brief-indian-microfinance-insitution-basix-sees-assets-fall-from-326m-to-22m/

MicroCapital: “Indian Microfinance Institution Trident Microfin Defaults on Loan from Kotak Mahindra Bank,” October 31, 2011, https://www.microcapital.org/microcapital-brief-indian-microfinance-institution-trident-microfin-defaults-on-loan-from-kotak-mahindra-bank/

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