MICROCAPITAL BRIEF: India’s Muthoot Raises $20m in Equity from Creation Investments Amidst Plans to Open 500 New Microfinance Branches

Creation Investments Capital Management, a US-based alternative investment company, recently announced that it has placed an equity investment of USD 20 million in Muthoot Microfin Limited, a unit of Indian conglomerate Muthoot Pappachan Group. Muthoot Microfin, whose focus is serving female entrepreneurs, plans to expand into additional regions of India including Bihar, Chhattisgarh, Haryana, Odisha, Pradesh, Punjab and Uttar. Over three years, it is planning to open 500 additional branches.

Established in 1887, Muthoot Pappachan has a presence in the financial services, hospitality, automotive, real estate, infrastructure, information technology and healthcare sectors. In addition to Muthoot Mahila Mitra, which provides microfinance and financial literacy training to women, Muthoot Pappachan’s holdings include Muthoot Fincorp, Muthoot Capital Services, Muthoot Housing Finance Company, Muthoot Exim Private Limited, and Muthoot Risk Insurance and Broking Services Private Limited. Muthoot Fincorp, which reported 2016 gross income of INR 2.1 billion (USD 30 million), is in the process of transferring microloans totaling INR 15 billion (USD 238 million) to Muthoot Microfin. As of 2016, Muthoot Microfin reports an outstanding portfolio of INR 4.3 billion (USD 60 million).

The mission of Creation Investments is to alleviate global poverty by making direct, for-profit investments in organizations that engage in economic development. Headquartered in the US city of Chicago, it manages three financial inclusion funds with a total of USD 275 million in committed capital as well as USD 50 million in other direct investments as of 2016. Its investees hold an aggregate gross loan portfolio of approximately USD 4.5 billion and serve 9 million entrepreneurs in 13 countries.

By Phoebe Rorke, Research Associate

Sources and Additional Resources

Muthoot Microfin raises $20 mn from US-based PE firm Creation Investment

India’s Muthoot Microfin to Raise $80m from Private Equity Investors for Expansion, Infrastructure

Muthoot Microfin

Muthoot Microfin Annual Report 2016

Fusion Microfinance Raises $24m in Equity from Creation Investments, GAWA, BIO, Oikocredit as Incofin Exits

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