Ujjivan Financial Services, a microfinance institution (MFI) based in India, recently raised INR 450 million (USD 8.55 million) in equity capital from the International Finance Corporation (IFC), the private-investment arm of the World Bank Group. It additionally raised INR 22.8 million (USD 433,240) from the Netherlands Development Finance Company (FMO), a Dutch development bank. Ujjivan reported raising INR 1.75 billon (USD 33.3 million) in total equity investments since January 2012. The new capital is expected to enable Ujjivan to meet its capital adequacy requirements over the next three to five years in addition to providing leverage for growth. [1]
Ujjivan was founded in 2004 and is based in Bangalore, India. Its products include business loans, educational loans, emergency loans and life insurance. As of June 30, 2012, Ujjivan reported total assets of USD 146 million, a gross loan portfolio of USD 126 million, return on assets (ROA) of 0.24 percent, return on equity (ROE) of 1.06 percent and 855,000 active borrowers. The microlender does not accept deposits. As of 2011, IFC reports total assets of USD 68.5 billion while FMO reports EUR 5.06 billion (USD 6.53 billion) in assets and EUR 2.59 billion (USD 3.34 billion) in net loans.
By Sarah Benali, Research Associate
About Ujjivan Financial Services
Ujjivan Financial Services is a microfinance institution (MFI) based in Bangalore, India, that was founded in 2004 and focuses on serving low-income women in urban and semi-urban areas. Its products include business loans, educational loans, emergency loans and life insurance. As of June 30, 2012, Ujjivan reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 146 million, a gross loan portfolio of USD 126 million, return on assets (ROA) of 0.24 percent, return on equity (ROE) of 1.06 percent and 855,000 active borrowers.
About International Finance Corporation
The International Finance Corporation (IFC) is a member of the World Bank Group that was created to support private sector development, mobilize private capital and provide advisory and risk mitigation services. A member of the World Bank Group, IFC offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2011, IFC has 182 member countries, total assets of USD 68.5 billion and USD 12.2 billion mobilized to 518 projects.
About The Netherlands Development Finance Company
The Netherlands Development Finance Company (FMO) is a public-private development bank that supports financial institutions and governments through “loans, participations, guarantees and other investment promotion activities.” It was founded in 1970 by the “Dutch government, private sector, employers and employee organizations.” Because it has access to government funds, it can take higher risks with its investments including offering long-term finance. It also specializes in local-currency finance. In 2011, FMO reported total assets of EUR 5.06 billion (USD 6.53 billion) and EUR 2.59 billion (USD 3.34 billion) in net loans.
Sources and Additional Resources:
[1] FirstPost Business Story: “World Bank believe in Indian microfinance; invests Rs 50 cr in Ujjivan,” September, 2012, http://www.firstpost.com/business/world-bank-believes-in-indian-microfinance-invests-rs-50-cr-in-ujjivan-460382.html
[2] MicroCapital.org Story: “MICROCAPITAL BRIEF: Bellwether Microginance Fund, Michael & Susan Dell Foundation Sell Shares in Ujjivan of India to Lok Capital of Mauritius, Undisclosed Social Investor,” September 6, 2012, https://www.microcapital.org/microcapital-brief-bellwether-microfinance-fund-michael-susan-dell-foundation-sell-shares-in-ujjivan-of-india-to-lok-capital-of-mauritius-undisclosed-social-investor/
[3] MicroCapital.org Story: “MICROCAPITAL BRIEF: Citi Foundation Grants $180k to Parinaam Foundation of India to Provide Financial Literacy Training to Clients of Microfinance Institution Ujjivan,” September 12, 2012, https://www.microcapital.org/microcapital-brief-citi-foundation-grants-180k-to-parinaam-foundation-of-india-to-provide-financial-literacy-training-to-clients-of-microfinance-institution-ujjivan/
MicroCapital Universe Profile: Ujjivan Financial Services
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Ujjivan+Financial+Services
MicroCapital Universe Profile: International Finance Corporation
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29
MicroCapital Universe Profile: The Netherlands Development Finance Company https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nederlandse+Financierings-Maatschappijvoor+Ontwikkelingslanden+N.V.+%28Netherlands+Development+Finance+Company%2C+FMO%29
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