MICROCAPITAL BRIEF: Suryoday Micro Finance of India Raises $3.8m from Lok Capital, Aavishkaar, HDFC

Suryoday Micro Finance Private Limited, an Indian microfinance institution (MFI), is reportedly seeking to increase its customer base by 1 million by 2014 and has raised INR 20 crores (USD 3.8 million) in capital from three of its investors: Aavishkaar Goodwell, a for-profit, Indian-Dutch joint venture; Lok Capital, a Mauritius-based microfinance investment vehicle; and the Housing Development Finance Corporation (HDFC), an India-based housing finance company. Specifics on the amounts invested by each party or the sizes of the stakes they hold were not disclosed.

Vineet Rai, Aavishkaar Goodwell’s managing director was quoted as saying, “Suryoday’s business model is strong, as it does not look at financial inclusion as a single dimensional platform for credit, but helps move the under-served population towards formal banking habits.” As of June 2012, Suryoday reported to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 18 million, return on assets (ROA) of 2.08 percent, return on equity (ROE) of 5.50 percent and 120,000 active borrowers. Suryoday does not accept deposits.

By Lena Phillips, Research Associate

About Suryoday Microfinance

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 June 2012, Suryoday reported to the US-based nonprofit Microfinance Information Exchange (MIX) a gross loan portfolio of USD 18 million, return on assets (ROA) of 2.08 percent, return on equity (ROE) of 5.50 percent and 120,000 active borrowers. The institution does not accept deposits.

About Lok Capital

Lok Capital LLC is a limited-life, limited-liability company based in Mauritius that provides equity and equity-linked investments to microfinance institutions (MFIs) in India. It consists of a venture capital fund, Lok I, and the Lok Foundation. Lok I was launched in 2006 with USD 22 million in investments from Accion, the Commonwealth Development Corporation (CDC), Development International Desjardins, Netherlands Development Finance Company (FMO), International Finance Corporation (IFC), Kreditanstalt für Wiederaufbau (KfW) and responsAbility Social Investments. The fund’s investments generally range in size from USD 500,000 to USD 3 million. Lok II was closed in 2012 with USD 65 million. Previous investors include IFC, CDC, KfW, FMO and responsAbility along with new investors Proparco and ASN Novib. The Lok Foundation provides technical assistance to Indian MFIs.

About Aavishkaar Goodwell

Aavishkaar Goodwell is an Indian-Dutch joint venture that is looking to build a portfolio of USD 25 million in 30 to 40 microfinance start-ups and 8 to 10 growing microfinance institutions (MFIs). The Dutch microfinance private equity company Goodwell Microfinance Development Company is the leading investor in Aavishkaar Goodwell, along with development finance institutions and commercial banks including the Netherlands Development Finance Company (FMO in Dutch), the World Bank’s International Finance Corporation (IFC) and Germany’s Deutsche Bank. Financial data are unavailable for Aavishkaar Goodwell.

About Housing Development Finance Corporation (HDFC) Limited

HDFC is an India-based housing finance institution that was established in 1977. Its primary objective is to promote home ownership by providing long-term financing options. As of March 2012, HDFC reported total assets of INR 1.7 trillion (USD 32 billion), return on equity (ROE) of 24 percent and return on assets (ROA) of 2.9 percent. HDFC has 322 offices that cater to 2400 cities and towns in India. It also has offices in Dubai, London and Singapore. HDFC provides financing services to non-resident Indians (NRIs) and persons of Indian origin (POI). NRIs are Indian citizens temporarily residing outside of the country while POIs are individuals of Indian descent who do not hold Indian citizenship but who are exempt from many restrictions applicable to other foreign nationals.

Sources and Additional Resources:

DeccanHerald.com Article, by Shayan Ghosh, http://www.deccanherald.com/content/308296/suryoday-microfinance-looks-inorganic-growth.html

MicroCapital.org Article, 25 September 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/#more-14794

MicroCapital.org Article, 15 September 2010: “MICROCAPITAL BRIEF: India’s Suryoday Microfinance Raises $4.5m from Lok Capital and Aavishkaar Goodwell,” https://www.microcapital.org/microcapital-brief-india%E2%80%99s-suryoday-microfinance-raises-4-5m-from-lok-capital-and-aavishkaar-goodwell/

MicroCapital.org Article, 8 December 2009: “MICROCAPITAL BRIEF: German Development Bank ‘KfW’ Provides $21m to Housing Development Finance Corporation (HDFC) to Loan to SKS Microfinance to Provide Loans to Low-Income Women for Home Improvement,” https://www.microcapital.org/microcapital-brief-german-development-bank-kfw-provides-21m-to-housing-development-finance-corporation-hdfc-to-loan-to-sks-microfinance-to-provide-loans-to-low-income-women-for-home-improveme/#more-4142

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: Lok Capital, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+Capital+LLC

MicroCapital Universe Profile: Aavishkaar Goodwell, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Aavishkaar+Goodwell+India+Microfinance+Development+Company+Ltd

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

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