MICROCAPITAL BRIEF: International Finance Corporation (IFC) to Loan Up to $11m to Suryoday Micro Finance of India

The International Finance Corporation (IFC), a member of the US-based World Bank Group, plans to loan up to USD 11 million to Indian microfinance institution (MFI) Suryoday Micro Finance Private Limited. An unspecified portion of the loan will be issued in the form of quasi-equity investment, which has both debt and equity characteristics, and the remainder will be senior debt, which is prioritized to be paid back first in the event of a company’s liquidation. The loan is reportedly intended to help Suryoday meet capital adequacy requirements to allow it expand operations.

The IFC investment follows an equity inflow of USD 3.7 million to Suryoday in January 2013 from for-profit, Indian-Dutch business development company Aavishkaar Goodwell, Mauritius-based fund manager Lok Capital and India-based housing finance company Housing Development Finance Corporation (HDFC).

As of December 2012, Suryoday reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 21 million, a gross loan portfolio of USD 20.5 million and 139,000 active borrowers.  Suryoday reported return on assets (ROA) of 2.08 percent and return on equity (ROE) of 5.50 percent as of June 2012. The institution does not accept deposits. As of 2012, IFC reported total assets of USD 75.7 billion.

By Nicole Boyd, Research Associate

About Suryoday Micro Finance Private Limited
Suryoday Micro Finance Private Limited is an Indian microfinance institution that provides loans and other financial services to low-income clients. Suryoday was established in 2008 as a non-banking financial institution (NBFI) and has its headquarters in Chennai. As of December 2012, Suryoday reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 21 million, a gross loan portfolio of USD 20.5 million and 139,000 active borrowers. Suryoday reported return on assets (ROA) of 2.08 percent and return on equity (ROE) of 5.50 percent as of June 2012.

About International Finance Corporation (IFC)
A member of the US-based World Bank Group, the International Finance Corporation (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 2012, IFC reported total assets of USD 75.7 billion.

Sources and Additional Resources:

VC Circle. “IFC to lend up to $11M to Pune-based Suryoday Microfinance,” http://www.vccircle.com/news/micro-finance/2013/04/02/ifc-lend-11m-pune-based-suryoday-microfinance

MicroCapital. March 27, 2013, “MICROCAPITAL BRIEF: International Finance Corporation Invests $28m in Equity in Bhutan National Bank to Increase Financial Inclusion; Lending to Micro-, Small and Medium-sized Enterprises,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-invests-28m-in-equity-in-bhutan-national-bank-to-increase-financial-inclusion-lending-to-micro-small-and-medium-sized-enterprises/

MicroCapital. February 8, 2013, “MICROCAPITAL BRIEF: International Finance Corporation (IFC), Yes Bank to Create Fund for Small Businesses in India,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-yes-bank-to-create-fund-for-small-businesses-in-india/

MicroCapital. February 6, 2013, “MICROCAPITAL BRIEF: Suryoday Micro Finance of India Raises $3.8m from Lok Capital, Aavishkaar, HDFC,” https://www.microcapital.org/microcapital-brief-suryoday-micro-finance-of-india-raises-200m-from-lok-capital-aavishkaar-hdfc/

MicroCapital. September 25, 2011, “MICROCAPITAL BRIEF: IFMR Capital Securitizes $15m in Microloans Originated by Indian Microfinance Institutions (MFIs) Asirvad, Disha, Grameen Koota, Mimoza, Satin Creditcare, Suryoday, SV Creditline, Utkarsh,” https://www.microcapital.org/microcapital-brief-ifmr-capital-securitizes-15m-in-microloans-originated-by-indian-microfinance-institutions-mfis-asirvad-disha-grameen-koota-mimoza-satin-creditcare-suryoday-sv-creditline/

MicroCapital Universe Profile: Suryoday Micro Finance Private Limited
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Suryoday+Micro+Finance+Private+Limited

MicroCapital Universe Profile: International Finance Corporation (IFC)
https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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