Janalakshmi Financial Services (JFS), an Indian microfinance institution (MFI), has raised INR 65 crores (USD 14 million) through a third round of equity capital fundraising. Citi Venture Capital International, a US-based private equity investor affiliated with Citigroup, has taken a “significant minority stake” in JFS that reportedly represents its first investment in India since 2008. The identities of the other investors have not been disclosed. Unitus Capital, an Indian advisory firm, served as the lead financial advisor and arranger for the transaction. US-based Morgan Stanley also served as an advisor [1].
Since late 2010, the so-called “Andhra Pradesh crisis” has resulted in very little fresh investment in the microfinance sector. Commercial banks have been reluctant to lend new funds, and as a result MFIs have reached out to social investors in order to expand loan portfolios [2]. But Eric Savage, President of Unitus Capital, believes that “the deal-making will pick up in the sector, following the slow period we have had post-AP crisis and with the RBI coming out with the guidelines which favour MFIs” [1].
As of March 31, 2010, JFS reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 25.5 million, a gross loan portfolio of USD 14.9 million, total deposits of USD 1.98 million, return on assets (ROA) of -3.05 percent, return on equity (ROE) of -8.74 percent and 82,000 active borrowers.
By Rohan Trivedi, Research Associate
About Janalakshmi Financial Services (JFS):
Janalakshmi Financial Services (JFS) is a microfinance institution (MFI) located in India. It is focused primarily on urban customers and offers loans, savings and microinsurance. As of March 31, 2010, JFS reported to the US-based nonprofit data provider Microfinance Information Exchange (MIX) total assets of USD 25.5 million, a gross loan portfolio of USD 14.9 million, total deposits of USD 1.98 million, return on assets (ROA) of -3.05 percent, return on equity (ROE) of -8.74 percent and 82,000 active borrowers.
About Citi Venture Capital International (CVCI):
Citi Venture Capital International (CVCI) is a private equity investor and investment advisor that was established by US-based Citigroup as a subsidiary of Citi Capital Advisors, a global alternative asset management firm. As of June 2011, CVCI manages approximately USD 7 billion in equity investments and committed capital, which is deployed through CVCI Growth Funds I and II.
About Unitus Capital:
An affiliate of Unitus Inc., a nonprofit organization with operations in India and the US, Unitus Capital is a financial advisory firm that specializes in arranging capital for microfinance institutions (MFIs) and other enterprises that aim to benefit the poor. Based in Bangalore, India, Unitus Capital offers financial advisory and capital markets services to clients in Asia. Between 2004 and 2010, Unitus Capital reports having arranged USD 25 million in debt capital for microfinance institutions (MFIs).
Sources and Additional Resources:
[1] VCCircle: “Bangalore MFI Janalakshmi Raises Rs 65Cr From CVCI, Others”, http://www.vccircle.com/500/news/bangalore-mfi-janalakshmi-raises-rs-65cr-from-cvci-others
[2] MicroCapital.org story, June 23, 2011: “MICROCAPITAL BRIEF: Spurned by Commercial Banks, Indian Microfinance Institutions (MFIs) Raise Funds from Social Investors IFC, ACCION, MicroVest, ShoreCap, Aavishkaar, BlueOrchard”, https://www.microcapital.org/microcapital-brief-spurned-by-commercial-banks-indian-microfinance-institutions-mfis-raise-funds-from-social-investors-ifc-accion-microvest-shorecap-aavishkaar-blueorchard/
MicroCapital.org story, May 5, 2011: “MICROCAPITAL BRIEF: Reserve Bank of India (RBI) Enacts Most of Microfinance Guidelines Proposed by Malegam Committee”, https://www.microcapital.org/microcapital-brief-reserve-bank-of-india-rbi-enacts-most-of-microfinance-guidelines-proposed-by-malegam-committee/
MicroCapital.org story, March 9, 2010: “MICROCAPITAL BRIEF: Janalakshmi Financial Services (JFS), a Microfinance Institution (MFI) Located in India, Raises $10m from Funders Including Tree Line Asia Master Fund (Singapore) Private Limited and Bellwether Microfinance Fund”, https://www.microcapital.org/microcapital-brief-janalakshmi-financial-services-jfs-a-microfinance-institution-mfi-located-in-india-raises-10m-from-funders-including-tree-line-asia-master-fund-singapore-private-limited-a/
MicroCapital.org story, November 9, 2010: “Payment Strike Hits India’s Andhra Pradesh State As Local Governments Urge Microfinance Borrowers Not to Repay”, https://www.microcapital.org/microcapital-brief-payment-strike-hits-india%E2%80%99s-andhra-pradesh-state-as-local-governments-urge-microfinance-borrowers-not-to-repay/
MicroCapital Universe Profile: Janalakshmi Financial Services (JFS), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Janalakshmi+Financial+Services+%28JFS%29
MicroCapital Universe Profile: Citi Venture Capital International (CVCI), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Citi+Venture+Capital+International+%28CVCI%29
MicroCapital Universe Profile: Unitus Capital, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Unitus+Capital
Browse the MicroCapital Universe and add your entry to the wiki at https://www.microcapital.org/microfinanceuniverse/
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