MICROCAPITAL BRIEF: India’s Micro Units Development and Refinance Agency (MUDRA) Bank Loans $5.5m to Microfinance Institution (MFI) Satin Creditcare

The Micro Units Development and Refinance Agency (MUDRA) Bank, an Indian public-sector financial institution that provides subsidized loans to microfinance institutions (MFIs) and non-banking financial institutions, recently announced that it has disbursed a loan of INR 350 million (approximately USD 5.5 million) to Satin Creditcare Network Limited, a for profit MFI based in Delhi, India. The proceeds of the credit facility are expected to be on-lent to micro-, small and medium-sized enterprises (MSMEs).

Vivek Tiwari, the chief operating officer of SCNL, said that “we will look to disburse this amount (Rs 35 Crore) (approximately USD 5.5 million) in the next three months. This will cater to 15,000 – 20,000 beneficiaries, who will be mainly small retailers, vegetable vendors and other small entrepreneurs”[1].

As of March 2014, SCNL reported USD 185 million in assets, a gross loan portfolio of USD 175.8 million outstanding to 800,000 active borrowers, return on assets of 1.67 percent and a return on equity of 11.77 percent. SCNL does not accept deposits. Financial information on MUDRA is not available.

By Victor Mugo, Research Associate.About Satin Creditcare Network Limited (SCNL)Established in 1990, Satin Creditcare Network Limited (SCNL) is a for-profit Indian microfinance institution (MFI) based in Delhi that provides financial services to micro-, small and medium-sized enterprises (MSMEs) in the country. As of March 2014, SCNL reported USD 185 million in assets, a gross loan portfolio of USD 175.8 million outstanding to 800,000 active borrowers, return on assets of 1.67 percent and a return on equity of 11.77 percent. SCNL does not accept deposits.

About Micro Units Development and Refinance Agency (MUDRA) Bank

The Micro Units Development and Refinance Agency (MUDRA) Bank is a public-sector financial institution in India that provides subsidized loans to microfinance institutions (MFIs) and non-banking financial institutions (NBFIs) in the country. As of April 2015, Mudra was functioning as a non-banking financial institution and a subsidiary of the Small Industries Development Bank of India (SIDBI), a development finance institution based in Lucknow, India, that focuses on lending to MFIs in the country. It is anticipated that in 2016 Mudra will be reorganized into a separate company and will be mandated to establish “policy guidelines” for MSMEs, to register and regulate MFIs, to stipulate “responsible financing practices,” and to ensure compliance with client protection principles and to define recovery methods for non-performing loans.

Sources and additional resources

[1] The Hindu Businessline: Mudra Bank disburses Rs 35 crore loan to Satin Creditcare
http://m.thehindubusinessline.com/banking/mudra-bank-disburses-rs-35-cr-loan-to-satin-creditcare/article7425653.ece

[2] MicroCapital Universe profile: Satin Creditcare Network Limited (SCNL)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Satin+Creditcare+Network+Ltd

[3] MicroCapital Universe profile: Micro Units Development and Refinance Agency Bank (MUDRA)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Micro+Units+Development+and+Refinance+Agency+Bank+%28MUDRA%29

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