MICROCAPITAL BRIEF: Fusion Microfinance Borrows $4m from Crédit Agricole CIB for Group Lending to Rural, Women-owned Businesses in India, Guaranteed by GCA Foundation

Fusion Microfinance, an India-based microfinance institution (MFI), recently borrowed local currency approximately equivalent to USD 4.4 million from Crédit Agricole Corporate and Investment Bank (CIB) India, a unit of France-based Crédit Agricole. The loan, which is guaranteed by the Luxembourg-based Grameen Crédit Agricole (GCA) Foundation, is for on-lending as group microloans to woman-owned micro-, small and medium-sized enterprises (MSMEs) “in rural and semi-urban areas.” Fusion also lends to repeat customers in financial distress due to natural disasters and health emergencies.

Fusion serves 2.2 million clients via 934 branches in 18 states. Its microfinance loans range in term up to 25 months with amounts up to INR 90,000 (USD 1,100) and interest rates of 19 percent to approximately 23 percent per year and fees of 1.25 percent plus tax. Fusion has a gross loan portfolio approximately equivalent to USD 534 million. The institution does not accept deposits.

Crédit Agricole, a French retail bank, in partnership with Muhammad Yunus, the founder of Grameen Bank of Bangladesh, established GCA Foundation in 2008. The organization seeks to reduce poverty by providing funding and technical assistance to microfinance institutions and other social businesses. As of 2022, it manages assets valued at EUR 89 million (USD 89 million) outstanding to 75 partners in 36 countries in Africa and Eurasia.

Established in 1981, Crédit Agricole CIB India offers “export and trade finance, project finance, and acquisition finance” to banks and large corporations. The entity reported net profits of INR 756 million (USD 9.5 million) on INR 166 billion (USD 2.0 billion) in assets under management for the fiscal year ending March 2021.

Crédit Agricole was established in 1885 to provide agricultural loans in France. As of December 2021, it serves 53 million people in 47 countries. It has assets under management valued at EUR 2.5 trillion (USD 2.5 trillion) as of March 2022.

By Ben Greissman, Research Associate

Sources and Additional Resources

GCA Foundation press release
https://www.gca-foundation.org/en/media-room/#the-foundation-grants-three-new-financings-in-south-and-south-east-asia

Fusion Microfinance homepage
https://fusionmicrofinance.com

Fusion Microfinance product offerings
https://fusionmicrofinance.com/microfinance/

Fusion Microfinance annual report
https://fusionmicrofinance.com/investor-relations/#annual-reports

Crédit Agricole CIB operations in India
https://www.ca-cib.com/our-global-markets/asia-pacific/india

Crédit Agricole CIB India annual report 2021
https://www.ca-cib.com/sites/default/files/2021-06/Credit%20Agricole%20CIB%20India%20-%20Financial%20Statements%20as%20of%20March%2031%2C%202021.pdf

Crédit Agricole key figures
https://www.credit-agricole.com/finance/finance/key-figures-credit-agricole-s.a

Crédit Agricole financial data Q1 2022
https://www.credit-agricole.com/en/pdfPreview/193656

Previous MicroCapital article on Fusion
https://www.microcapital.org/microcapital-brief-fusion-microfinance-raises-12m-in-debt-from-bank-im-bistum-essen-bib-to-increase-financial-inclusion-for-women-in-india/

Previous MicroCapital article on GCA Foundation
https://www.microcapital.org/microcapital-brief-komida-secures-3m-from-grameen-credit-agricole-foundation-for-microfinance-for-women-in-rural-indonesia/