Ujjivan Financial Services, a Bangalore-based microfinance institution (MFI), has completed the fourth round of equity infusion by raising Rs 940 million (USD 18.7 million) making it the fourth highest capitalised MFI in India with total paid up capital and reserves standing at over Rs 1.08 billion (USD 21.5 million) The increase in capital was largely invested by existing shareholders including Unitus Equity Fund (UEF) managed by Elevar Equity L.L.C., Bellwether Microfinance Fund, Michael & Susan Dell Foundation, A.W. Holdings and individual investors including promoter & CEO Samit Ghosh. The five new investors in this private placement transaction will include: Sequoia Capital, Lok Capital, Unitus Equity Fund II, India Financial Inclusion Fund and SIDBI.
A unique feature of this deal was that this is the first time a microfinance institution has been able to offer a market determined exit to individual investors and this was done in collaboration with Bellwether Microfinance Fund and UEF. This increase in equity will place it below only SKS Microfinance Private Limited, SHARE Microfin and Spandana Sphoorty Financial Limited in India for the amount of equity held by an MFI. New investors Sequoia Capital and SIDBI are also investors in SKS Microfinance.
Ujjivan, an MFI created in 2004, has a mission to provide financial services to the economically active poor and to enable them to lead a better life. Its goals are to have customers free of poverty in five years and serve 500,000 customers in six years. It currently has over 56 thousand active borrowers, 100 percent of which are women, with the average loan balance per borrower at USD 161. It reported total assets of USD 10.2 million at the end of March, 2008 with a debt to equity ratio of 332.11 percent and a return on equity of -47.44 percent. Its equity prior to this latest round of investment stood at USD 2.36 million.
By Lori Curtis, Research Assistant
Bellwether Microfinance Fund: “Home“
Business Standard: “Ujjivan raises Rs 94 cr in 4th round funding“
Michael and Susan Dell Foundation: “Home“
Ujjivan Financial Services: “Ujjivan Raises Rs. 94 Crores of Equity Capital“
Unitus Equity Fund: “Home“
- MICROCAPITAL BRIEF: Tala Raises $30m in Series B Equity from IVP, Ribbit Capital, Existing Investors to Expand Mobile Phone Microlending in Asia, Latin America
- MICROCAPITAL BRIEF: Indonesian Online Lender UangTeman Raises $12m in Equity Funding for Consumer Loans, Research and Development
- MICROCAPITAL BRIEF: D.light Raises $15m in Equity from Energy Access Ventures, KawiSafi, NewQuest, Omidyar to Expand Sales of Solar Products via Microloans, Develop Televisions for Emerging Markets
- MICROCAPITAL BRIEF: Interest Rate Cuts by Reserve Bank of India Trickle Down to Microfinance Loans
- MICROFINANCE PUBLICATION ROUND-UP: Lessons on IPOs from Indian MFIs; Growth In Impact Investing; 10-Year Survey of Microfinance Investment Vehicles