MICROCAPITAL BRIEF: Suryoday Micro Finance of India Raises $4.5m in Equity from International Finance Corporation (IFC), Aavishkaar Goodwell, Lok Capital

Suryoday Micro Finance Private Limited, an Indian microfinance institution (MFI), recently received an equity infusion totalling INR 270 million (USD 4.5 million) from three investors: INR 150 million (USD 2.5 million) from the International Finance Corporation (IFC), the private-investment arm of the World Bank Group, and INR 62 million (USD 1 million) each from Aavishkaar Goodwell, a for-profit Indian-Dutch joint venture promoting economic development, and Lok Capital, a Mauritius-based venture fund focused on microfinance and other social businesses in India [1] [2]. Suryoday intends to use the funding to expand its branch network in the country. The sizes of the stakes taken by the investors has not been disclosed.

As of March 2013, Suryoday reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 37 million, a gross loan portfolio of USD 28 million, 156,200 active borrowers, return on assets (ROA) of 1.50 percent and return on equity (ROE) of 3.94 percent. The institution does not accept deposits. As of 2014, Suryoday has 80 branches in India.

As of fiscal year-end 2013, IFC reports total assets of USD 77.5 billion and has 184 member countries. As of 2012, Aavishkaar Goodwell manages a portfolio of USD 157 million in 4 funds. As of the same year, Lok Capital manages approximately USD 85 million through its two investment funds.

By Nisha Koul, Research Associate

About Suryoday Micro Finance Private Limited: Suryoday Micro Finance Private Limited is an Indian microfinance institution that provides loans to low-income clients. Suryoday was established in 2008 as a non-banking financial institution (NBFI) and has its headquarters in Chennai. As of March 2013, Suryoday reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 37 million, a gross loan portfolio of USD 28 million, 156,200 active borrowers, return on assets (ROA) of 1.50 percent and return on equity (ROE) of 3.94 percent. The institution does not accept deposits. As of 2014, Suryoday has 80 branches across the country.

About International Finance Corporation (IFC): The International Finance Corporation (IFC), a US-based multilateral development bank and member of the World Bank Group, 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. IFC has 184 member countries and reported total assets of USD 77.5 billion as of fiscal year-end 2013.

About Aavishkaar Goodwell: Aavishkaar Goodwell is a for-profit Indian-Dutch joint venture that invests in economic development projects, managing a loan portfolio of USD 157 million in four funds as of December 2012. Aavishkaar Goodwell’s portfolio includes investments in agriculture, education, energy, handicrafts, health, water and sanitation, technology, and financial inclusion. The Dutch private equity company Goodwell Microfinance Development Company is the leading investor in Aavishkaar Goodwell, along with development finance institutions and commercial banks that include the Netherlands Development Finance Company (FMO in Dutch), the World Bank Group’s International Finance Corporation (IFC) and Germany’s Deutsche Bank.

About Lok Capital: The Lok Capital Initiative was founded in 2000 with support from the US-based nonprofit Rockefeller Foundation. Its goal is to “…promote inclusive growth by supporting the development of social enterprises to deliver basic services to serve the BoP [base of the pyramid] segment in a scalable, affordable and commercially viable manner.” The initiative is comprised of Lok Capital, a Mauritius-based venture capital fund that places equity and equity-linked investments in microfinance institutions (MFIs) and social enterprises in the education, healthcare and “livelihoods” sectors; and the Lok Foundation, a nonprofit entity that provides “specialized funding and long-term technical assistance for financial and social inclusion.” Lok Capital makes its investments through two funds, Lok Capital I and II. Lok Capital I was launched in 2006 with USD 22 million in investments from Accion, The Commonwealth Development Corporation (CDC), Développement international Desjardins, Netherlands Development Finance Company (also known by its Dutch acronym 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 Capital II was closed in 2012 with USD 65 million. Its investors included previous Lok investors IFC, CDC, KfW, FMO and responsAbility along with new investors Proparco and ASN Novib.

Sources and Additional Resources:

[1] The Economic Times, “Suryoday Microfinance Raises Rs 27 crore in Fresh Funding,” http://articles.economictimes.indiatimes.com/2014-06-16/news/50623719_1_aavishkaar-goodwell-incofin-investment-management-intellecap

[2] Suryoday, “Milestones,” http://suryodaymf.com/home

MicroCapital Story, April 8, 2013, “International Finance Corporation (IFC) to Loan Up to $11m to Suryoday Micro Finance of India,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-loan-up-to-11m-to-suryoday-micro-finance-of-india/

MicroCapital Story, February 6, 2013, “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 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

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

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

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