MICROCAPITAL BRIEF: Utkarsh Micro Finance, Advans SA Land $24m in Equity from CDC, Lok Capital, Aavishkaar Goodwell India, International Finance Corporation, Norwegian Microfinance Initiative

The Commonwealth Development Corporation (CDC), a development finance institution owned by the UK government, has announced that it has made an equity investment of USD 11 million in Utkarsh, a northern Indian microfinance institution (MFI) [1]. CDC also announced a “top-up” investment of USD 3.5 million in Advans SA, a Luxembourg-based organization that builds and supports MFIs in Africa and Asia.

The investment in Utkarsh was part of the MFI’s fourth round of funding, which totaled USD 21 million with participation in unspecified amounts from Mauritius-based venture capital fund Lok Capital, Aavishkaar Goodwell India Microfinance Development Company (AG), an Indo-Dutch for-profit investor in Indian MFIs, International Finance Corporation, the private-sector investment arm of the World Bank Group and Norwegian Microfinance Initiative (NMI), a partnership between the Norwegian public and private sectors that invests in and provides technical support for MFIs in developing countries [2]. As of March 2014, Utkarsh reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 77 million, a gross loan portfolio of USD 59 million, approximately 320,000 borrowers, return on assets (ROA) of 2.35 percent and return on equity (ROE) of 11.46 percent. Utkarsh, which does not accept deposits, reports having 224 branches as of 2014.

As of 2014, the Advans network serves approximately 353,000 loan clients in eight countries: Cambodia, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Ghana, Pakistan, Tanzania, and Nigeria. As of March 2014, Advans SA held total assets of EUR 50.8 million (USD 60 million).

In 2013, CDC invested GBP 416 million (USD 655 million) in businesses in developing countries, and made a total profit (after tax) of GBP 117 million (USD 184 million). As of 2013, CDC’s portfolio of investments stands at GBP 2.5 billion (USD 3.93 billion) and includes 1,301 investee businesses.

By Nisha Koul, Research Associate

About Utkarsh Micro Finance Private Limited (Utkarsh): Utkarsh Micro Finance Private Limited is a microfinance institution (MFI) based in Varanasi, India. It aims to provide access to credit in the northern Indian states of Uttar Pradesh, Madhya Pradesh and Bihar. As of March 2014, Utkarsh reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 77 million, a gross loan portfolio of USD 59 million, approximately 320,000 borrowers, return on assets (ROA) of 2.35 percent and return on equity (ROE) of 11.46 percent. Utkarsh, which does not accept deposits, reports having 224 branches as of 2014.

About Advans SA: Launched in 2005, Advans SA SICAR is a venture capital company that is registered in Luxembourg and managed by Horus Development Finance of France. The mission of Advans is to increase access to financial services for micro-, small and medium-sized enterprises (MSMEs) in emerging economies. In addition to equity and debt funding for microfinance institutions (MFIs), Advans provides technical assistance to MSMEs in an effort to assist them in achieving sustainable and profitable operations. As of 2014, the Advans network serves approximately 353,000 loan clients in eight countries: Cambodia, Cameroon, Côte d’Ivoire, Democratic Republic of the Congo, Ghana, Pakistan, Tanzania, and Nigeria. As of March 2014, Advans SA held total assets of EUR 50.8 million (USD 60 million).

About Commonwealth Development Corporation (CDC): The Commonwealth Development Corporation (CDC) was founded in 1948 as a development finance institution owned by the United Kingdom government’s Department for International Development (DFID). CDC provides investments in businesses in developing countries, including investments in equity and debt guarantees through funds and intermediaries. In 2013, CDC invested GBP 416 million (USD 655 million) and made a total profit (after tax) of GBP 117 million (USD 184 million). As of 2013, CDC’s portfolio of investments stands at GBP 2.5 billion (USD 3.93 billion) and includes 1,301 investee businesses.

Sources and Additional Resources:

[1] CDC News, CDC makes new direct investments to boost Indian microfinance

[2] The Economic Times, Utkarsh raises $21 million from Lok Capital, Commonwealth Development Corporation

MicroCapital Story, December 2014, CDC, Creation Investments, DEG, International Finance Corporation (IFC), FMO Acquire 40% Equity Stake in India’s Equitas for $51.4m

MicroCapital Story, October 2014, Advans SA Raises $27m from Existing Shareholders in Third Round of Fundraising

MicroCapital Story, January 2014, Indian Microfinance Institution Utkarsh Raises $12m in Non-convertible Debentures from UTI International Wealth Creator 4, Microfinance Enhancement Facility, AAV Sarl

MicroCapital Universe Profile, Utkarsh Micro Finance Private Limited

MicroCapital Universe Profile, Advans Group

MicroCapital Universe Profile, Commonwealth Development Corporation (CDC)

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