MICROCAPITAL BRIEF: India’s Micro Units Development and Refinance Agency (MUDRA) Bank Loans $9.3m to Microfinance Institutions (MFIs) Arohan,  Belstar, Equitas, Margdarshak, Sonata

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 had disbursed loans totalling INR 620 million (approximately USD 9.3 million) to MFIs in India.

The funds are intended to be on-lent to micro-, small and medium-sized enterprises (MSMEs) in the country. The beneficiaries include Arohan Financial Services, which is based in Kolkata and offers financial services to low-income individuals in urban areas of eastern India; Belstar Investment and Finance Private Limited, which is based in Bangalore and is controlled by Indian NGO Hand by Hand; Equitas Microfinance Private Limited, which provides microcredit to low-income households and is based in Chennai; Margdarshak Financial Services Limited, which has its headquarters in Lucknow and offers group-based loans to low-income households in northern India; and Sonata Finance Private Limited, which is based in Allahabad and offers financial services to women. Although the individual transaction amounts are not available, each of the loans bears an annual interest rate of seven percent.

As of March 2015, Arohan reported total assets of USD 37.1 million, a gross loan portfolio of USD 31.7 million, return on assets of 2.1 percent, return on equity of 6 percent and 220,000 active borrowers. As of March 2015, Belstar reported total assets of USD 35.4 million, a gross loan portfolio of USD 32.7 million, return on assets of 1.8 percent, return on equity of 9.32 percent and 178,000 active borrowers. As of March 2015, Equitas reported total assets of USD 350.7 million, a gross loan portfolio of USD 343.9 million, return on assets of 3.6 percent, return on equity of 19.32 percent and 2.3 million active borrowers. As of March 2014, Margdarshak reported total assets of INR 440 million (approximately USD 6.7 million), and a gross loan portfolio of INR 371 million (approximately USD 5.6 million). As of March 2014, Sonata reported total assets of USD 75.1 million, a gross loan portfolio of USD 57.7 million, return on assets of 2.3 percent, return on equity of 8.8 percent and 280,000 active borrowers. The MFIs do not accept deposits. Mudra was launched with an initial INR 230 billion (approximately USD 3.46 billion )[1].



By Victor Mugo, Research Associate

About Micro Units Development and Refinance Agency (MUDRA) Bank

The Micro Units Development and Refinance Agency Bank (MUDRA) is a public-sector financial institution in India that provides subsidized loans to microfinance institutions (MFI) and non-banking financial institutions in the country. As of April 2015, the bank was functioning as a non-banking financial 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 reorganised into a separate company mandated to establish “policy guidelines” for micro-, small and medium-sized enterprises (MSMEs), register and regulate MFIs, stipulate “responsible financing practices,” ensure compliance with client protection principles and define appropriate recovery methods for non-performing loans.Mudra was launched with an initial INR 230 billion (approximately USD 3.46 billion)[1].

About Arohan Financial Services

Arohan Financial Services is a microfinance institution (MFI) based in Kolkata, India. Founded in 2006, the organization offers loans and life insurance products primarily in urban areas of eastern India. As of March 2015, Arohan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 37.1 million, a gross loan portfolio of USD 31.7 million, return on assets of 2.1 percent, return on equity of 6 percent and 220,000 active borrowers. The MFI does not accept deposits.

About Belstar Investment and Finance Private Limited

Belstar Investment and Finance Limited is a non-banking financial institution based in Bangalore, India. It is the “microfinance delivery arm” of Hand in Hand, a nongovernmental charitable organization that “aims to reduce poverty through creating jobs in microfinance, education, health, and information.” Hand in Hand acquired Belstar in 2008. Its primary product is microenterprise lending. As of March 2015, Belstar reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 35.4 million, a gross loan portfolio of USD 32.7, return on assets of 1.8 percent, return on equity of 9.32 percent and 178,000 active borrowers. The MFI does not accept deposits.

About Equitas Microfinance Private Limited

Equitas Microfinance Private Limited is a microfinance institution (MFI) that was created in December 2007 and is based in Chennai, India. The company provides microcredit to low-income households in India. The objective of the company is to make credit available at a “reasonable” cost and in a transparent manner to the underbanked populations of India as well as to achieve “sufficient” returns on investment in order to attract capital. As of March 2015, Equitas reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 350.7 million, a gross loan portfolio of USD 343.9, return on assets of 3.6 percent, return on equity of 19.32 percent and 2.3 million active borrowers. The MFI does not accept deposits.


About Margdarshak Financial Services Limited

Margdarshak Financial Services Limited (MFSL) is a microfinance institution (MFI) that was incorporated in 2007 by the Reserve Bank of India (RBI) and provides credit facilities and pension services to low-income people in northern India. As of March 2014, Margdarshak Financial Services reported total assets of INR 440 million (approximately USD 6.7 million) and a gross loan portfolio of INR 371 million (approximately USD 5.6 million). The MFI does not accept deposits


About Sonata Finance Private Limited

Established in 2006, Sonata Finance Private Limited is an Indian microfinance institution (MFI) tha has its headquarters in Allahabad, Uttar Pradesh. It offers income-generating loans, emergency loans, savings and insurance products to low-income women in India. As of March 2014, Sonata reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 75.1 million, a gross loan portfolio of USD 57.7 million, return on assets of 2.3 percent, return on equity of 8.8 percent and 280,000 active borrowers. The MFI does not accept deposits.





Sources and additional resources


[1] Live Mint: Mudra Sanctions Loan of RS 240 Crore to MFIs
http://www.livemint.com/Politics/DaVSmDeL7e0OyAQmmK8BuI/Mudra-sanctions-loans-of-Rs240-crore-to-MFIs.html


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




[3] MicroCapital Universe Profile: Arohan Financial Services
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Arohan


[4] MicroCapital Universe Profile: Belstar Investment and Finance Private Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Belstar+Investment+and+Finance+Limited


[5] MicroCapital Universe Profile: Equitas Microfinance Private Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Equitas+Micro+Finance+India+Private+Limited


[6] MicroCapital Universe Profile: Margdarshak Financial Services Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=margdarshak




[7] MicroCapital Universe Profile: Sonata Finance Private Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sonata+Finance+Pvt+Ltd




Do you know that MicroCapital publishes the MicroCapital Monitor newspaper each month? Find out more at https://www.microcapital.org/products-page

Similar Posts: