MICROCAPITAL STORY: For-Profit Equitas Microfinance to Raise $12.5m via Private Equity

A new player to India’s microfinance space, Chennai-based Equitas has announced it will enlist the assistance of private equity firms to secure the organization’s second round of funding. Equitas hopes to raise USD 12.5 million from two private equity firms over a two-month period to establish additional branch offices in India’s southern region.

Founded in December 2007, Equitas is a commercial microfinance institution that has enjoyed considerable growth since its inception. In the first four months of operation, the firm opened 15 branch offices, served 25,000 predominately female clients and built a gross loan portfolio of USD 6.25 million. Additional financial data on Equitas is not available, as the fledgling organization has yet to formally release comprehensive financial information. Data provided herein was compiled from press reports.

According to a report by Sa-Dhan (p. 14), an association of community development financial institutions, a large majority (p.14) of microfinance institutions operating in India are nonprofit organizations that do not seek a return on their investment. The financial sustainability of Equitas evidences a recent trend in the emergence of commercialized microfinance institutions in India, as described in the report (p. 14).

By Ryan Benson, Research Assistant

Additional Resources:

Sa-Dhan: Existing Legal and Regulatory Framework for the Microfinance Institutions in India: Challenges and Implications

Mix Market: India Country Profile

The Hindu: Interivew with Equitas’ CEO

Livemint: Story

Social Edge: Story

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