MICROCAPITAL BRIEF: India’s Rashtriya Gramin Vikas Nidhi North East (RGVN) Microfinance Raises $7m in Equity Funding from Norwegian Microfinance Initiative Fund III, Oikocredit of the Netherlands, Dia Vikas Capital of India

Rashtriya Gramin Vikas Nidhi North East (RGVN), a microfinance institution (MFI) based in the Indian state of Assam, reportedly has raised approximately INR 420 million (USD 6.98 million) in equity funding from new investors [1]. The investors include the Norwegian Microfinance Initiative (NMI) Fund III, an investment vehicle managed by NMI that focuses on social impact investment in Africa and Asia; Oikocredit, a Netherlands-based cooperative and social investment firm; Dia Vikas Capital, an India-based investment firm focused on funding and providing support services for microfinance institutions (MFIs); and Small Industries Development Bank of India, a government-backed financial institution that aims to support micro-, small and medium-sized enterprises (MSMEs) in India  [2][3]. RGVN will use the increased funding to expand lending activity in northeast India. Information regarding the equity received by each firm is unavailable.

According to a statement attributed to Njord Andrews, the investment director of NMI, “NMI shares the same objectives as…of RGVN – providing financial and non-financial services to clients in the under-penetrated region. RGVN is having significant positive financial and social impact in North East India.” Rupali Kalita, the managing director of RGVN, reportedly added that, “we are optimistic that this equity raise will help us to reach out to more underprivileged [people], thus boosting the region’s growth.” [1]

As of December 2013, RGVN reported total assets of USD 23.6 million, a gross loan portfolio of USD 19.6 million and 168,000 borrowers. RGVN does not accept deposits. As of 2012, RGVN reported return on assets of 3.18 percent and return on equity of 22.4 percent. More recent financial information for the institution is not available. NMI Fund III was established in 2013 with an initial fund size of USD 31 million. NMI operates three funds and, as of 2013, reported total partnership capital of NOK 782 million (USD 125 million) [4]. As of the same year, Oikocredit reported total assets of EUR 756 million (USD 1.05 billion) and 815 active investors, of which 596 were MFIs [5]. As of 2011, Dia Vikas has made cumulative investments of approximately USD 29 million in16 socially focused MFIs.

By Benjamin Krupp, Research Associate

About Rashtriya Gramin Vikas Nidhi North East (RGVN)

Established in 1996, Rashtriya Gramin Vikas Nidhi North East (RGVN) is an Assam-based microfinance institution (MFI) that serves the northeast regions of India. The MFI provides loans to individuals and micro-businesses, microinsurance products, and trainings on vocational skills. As of December 2013, RGVN reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 23.6 million, a gross loan portfolio of USD 19.6 million and 168,000 borrowers. As of 2012, RGVN reported return on assets of 3.18 percent and return on equity of 22.4 percent. RGVN does not accept deposits.

About Norwegian Microfinance Initiative (NMI)

The Norwegian Microfinance Initiative (NMI), a registered private limited liability company, is a partnership between the Norwegian public and private sectors that invests in and provides technical support for microfinance institutions (MFIs) in developing countries. Established in 2008, the mission of NMI is “to contribute to the empowerment of poor people and to the creation of jobs, wealth, and economic and social sustainability in developing countries by investing in and supporting MFIs.” As of 2014, NMI makes its investments through three investment funds: NMI Global Fund, which supports MFIs that have operations deemed “large and sustainable” with assets of NOK 360 million (USD 60 million); NMI Frontier Fund, which supports emerging MFIs in Sub-Saharan Africa and South Asia with assets of NOK 240 million (USD 40 million); and NMI Fund III, which supports MFIs considered to be financially sustainable or are likely to become financially sustainable in the near future. NMI Fund III was created in June 2013 with investor commitments of NOK 182 million (USD 30.5 million).

About Oikocredit

Oikocredit is a Dutch cooperative investment fund comprised of church groups, cooperatives and individual investors. Established in 1975, it works in 70 countries, investing mainly in microfinance institutions (MFIs) as well as trade cooperatives, fair trade organizations and small and medium-sized enterprises (SMEs) in the developing world. As of 2013, Oikocredit reported total assets of EUR 756 million (USD 1.05 billion) and 815 active investors, of which 596 were MFIs.

About Dia Vikas Capital

Established in 2008, Dia Vikas Capital is an Indian social investment fund that is a 100 percent subsidiary of nonprofit Opportunity International Australia. Dia Vikas’ interventions include provision of equity and quasi equity support and provision of technical and operational support to microfinance institutions (MFIs). As of 2011, Dia Vikas has made cumulative investments of approximately USD 29 million in16 socially focused MFIs. More recent financial information on the firm is unavailable.

About Small Industries Development Bank of India (SIDBI)

Established by the Indian Parliament in 1990, the Small Industries Development Bank of India (SIDBI) offers products and services in areas including direct finance, international finance, government subsidy and fixed deposits. Its clients include financial institutions, investors and entrepreneurs. SIDBI participates in the Indian microfinance sector by providing credit and capacity building grants to large- and medium-scale microfinance institutions. As of March 2012, SIDBI reported total assets of INR 594 billion (USD 10.9 billion).

Sources and Additional Resources

[1] The Economic Times: RGVN Microfinance Raises About Rs 42 Crore in Fresh Round of Equity Funding

[2] Norwegian Microfinance Initiative: NMI Fund III

[3] Oikocredit: Home

[4] Norwegian Microfinance Initiative: NMI Overview

[5] Oikocredit: Annual Report 2013

MicroCapital, April 10, 2014: India-based Satin Creditcare Raises $4.7m in Equity from Norwegian Microfinance Initiative (NMI)

MicroCapital, September 23, 2013: Ujjivan Financial Services Raises $7.9m from Oikocredit for On-Lending to Microfinance Clients

MicroCapital, April 20, 2011: Social Venture Capital Firm Dia Vikas Capital Makes Investments Totaling $6.1m in Indian Microfinance Institutions (MFIs) BWDA Finance Limited, Rashtriya Gramin Vikas Nidhi North East, ESAF Microfinance and Investment Private Limited, Cashpor Microcredit

MicroCapital Universe Profile: Rashtriya Gramin Vikas Nidhi North East (RGVN)

MicroCapital Universe Profile: Norwegian Microfinance Initiative (NMI)

MicroCapital Universe Profile: Oikocredit

MicroCapital Universe Profile: Dia Vikas Capital

MicroCapital Universe Profile: Small Industries Development Bank of India (SIDBI)

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