Grameen Financial Services Private Limited, an Indian microfinance institution also known as Grameen Koota, has raised INR 20 crore (USD 4.27 million) from a sale of secured, redeemable, non-convertible debentures (NCDs) to MicroVest I LP, a US-based private equity fund. Grameen Koota Managing Director Suresh Krishna called the transaction “critical from the perspective of diversified funding.” Unitus Capital acted as the sole financial advisor to Grameen Koota on the sale of the NCDs, which have been listed on the Bombay Stock Exchange.
About Grameen Koota
Grameen Koota is a microfinance institution (MFI) based in Bangalore, India, that was founded in 1999. It is a division of Grameen Financial Services Private Limited, and began its operation with funding from Grameen Trust, a non-government organization that supports microfinance globally through funding, training and technical assistance. As of December 12, 2009, Grameen Koota provides credit to low-income households through 117 branches in Karnataka and Maharashtra. It is one of the first MFIs in the world to use Mifos, an open source management information system that aids in monitoring of borrowers and portfolios.
– Country of Incorporation: India
– Year Founded: 1999
– Legal Status: Non-Banking Financial Company
– Outstanding Loan Portfolio: USD 33.3 million (as of 12/December/09)
– Area of Operation: India
– Participant(s)/Backer(s)/Investor(s): Grameen Financial Services Private Limited, Grameen Trust, MicroVentures SpA, MicroVentures Investments, Incofin, Aavishkaar Goodwell, ACCION International
– Currency: INR
– Director: Vinatha M Reddy
About MicroVest I LP
MicroVest I LP is a microfinance investment vehicle managed by MicroVest Capital Management LLC, which aims to link investor capital with the working poor in poor countries. MicroVest I is MicroVest Capital Management’s first fund and was founded by three nonprofit institutions: CARE, MEDA and Seed Capital Development Fund. As of its 2009 Annual Report, MicroVest had funded 39 microfinance institution in 22 countries since 2004. MicroVest I offers investors opportunities to directly invest in an instrument that aims to facilitate the growth of financial institutions with a focus on both return and fiduciary responsibility. The target investment mix is 75 percent debt and 25 percent equity.
– Country of Incorporation: United States
– Year Founded: 2004
– Fund Assets (as of day/month/year): USD 37 million (as of 31/March/09)
– Fund Assets Allocated to MFI Investment (as of day/month/year): USD 28.7 million (as of 31/March/09)
– Number of MFI Investments (as of day/month/year): 24 (as of 31/March/09)
– Projected Return (and timeframe): 7%-8% (Yearly Projection at Founding)
Sources and Resources:
Grameen Koota Website:
http://www.grameenkoota.org/
MicroVest Microfinance Information Exchange (MIX) Profile:
http://www.mixmarket.org/funders/microvest-i
MicroVest Website:
http://www.microvestfund.com/microvest1.html
MicroCapital Universe:
https://www.microcapital.org/microfinanceuniverse/
Unitus Capital:
http://www.unitus.com/about-us/unitus-strategic-affiliates/unitus-capital
Source press release submitted by Unitus Capital:
Grameen Financial Services raises Rs. 20 crore of NCDs through FII route
Grameen Financial Services Private Limited (popularly known as Grameen Koota) has raised INR 20 crore (approximately USD 4.27 million) of debt capital through an issuance of secured, redeemable, non-convertible debentures (NCDs) to MicroVest I LP (MV I), a private equity fund formed under US laws and registered as a Foreign Institutional Investor (FII) sub-account with the SEBI. With Unitus Capital acting as the sole financial advisor, the MV I–Grameen Koota deal marks a FII-registered microfinance investment vehicle (MIV) directly subscribing, for the first time, to a primary NCD issuance by an Indian MFI.
Mr. Suresh Krishna, Managing Director, Grameen Koota, remarked “This transaction is a great milestone for Grameen Koota and is very critical from the perspective of diversified funding. We are proud of this landmark transaction with MicroVest.”
“MicroVest is excited to contribute to Grameen Koota’s growth and development,” said Gil Crawford, CEO of MicroVest Capital Management LLC. “Grameen Koota is a sophisticated and well-respected MFI. Not only is this deal an excellent opportunity for MV I to enter into adynamic microfinance market with tremendous latent demand, it also advances an industry-wide vision ofcomprehensive, commercial, financial inclusion throughout India. MicroVest is always looking to capture innovative market opportunities and is pleased to bring this milestone investment to its MV I portfolio.”
“Diversification of funding sources is very important to Indian MFIs. Grameen Koota and MicroVest have entered into a landmark transaction allowing an IndianMFI for the first time to directly raise fundsby issuingNCDsthroughthe FII route. Unitus Capital isproud to work with these groundbreaking market leaders in this historic transaction,” states Eric Savage, Managing Director of Unitus Capital.
Grameen Koota has listed the NCDs on the Bombay Stock Exchange.
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