Arohan Financial Services, an India-based microfinance institution (MFI) offering credit and insurance services to groups, individuals and other MFIs, recently accepted an equity investment in local-currency equivalent to USD 11 million from the Dutch development bank Financierings-Maatschappij voor Ontwikkelingslanden (FMO). Arohan plans to use the fresh capital to grow its business, particularly through “technology-enabled [service] delivery.”
Arohan was established in 2006 and is a member of the Aavishkaar-Intellecap Group, which comprises “equity funds, a venture debt vehicle [and] a microfinance and advisory business.” Arohan’s primary product, Saral, is a loan product for groups of about four women in amounts of INR 10,000 (USD 120) to INR 75,000 (USD 900) with terms of up to three years and an interest rate of 24.5 percent. Arohan also offers health insurance; life insurance; and individual loans for purposes such as buying solar appliances, bicycles and agricultural products. The firm’s MFI loans range up to INR 250 million (USD 3 million) with terms of one to three years. As of March 2022, Arohan reported a gross loan portfolio of INR 41 billion (USD 500 million) and approximately 1.9 million customers served through 740 branches, mainly in the eastern and northern parts of India.
Established in 1970, FMO is 51-percent held by the Dutch government and 49-percent by private investors. The institution works toward the UN Sustainable Development Goals by funding capacity development and by placing debt and equity investments in sectors such as agribusiness, financial institutions and energy. As of December 2021, FMO reported a committed portfolio of EUR 9.7 billion (USD 10.2 billion).
By Renata Samadova, Research Associate
Sources and Additional Resources
FMO monthly transaction data
https://www.fmo.nl/news-detail/939b53ac-fc5e-41cc-8c96-b32ca7fa2100/monthly-transaction-overview-february
Arohan homepage
https://www.arohan.in
Arohan 2021-2022 annual report
https://www.arohan.in/wp-content/themes/arohan/resources/Arohan-Annual-Report-FY-21-22.pdf
Aavishkaar Group homepage
https://aavishkaargroup.com/
FMO homepage
https://www.fmo.nl
Previous MicroCapital article on FMO
https://www.microcapital.org/microcapital-brief-fmo-lends-10m-to-latin-american-agriculture-development-corporation-laad-to-boost-green-investment/
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