MICROCAPITAL BRIEF: Nordic Microfinance Initiative, Adar Poonawalla, Rajiv Dadlani Group Boost Equity Stakes in Svasti of India

Three previous investors in the company recently committed an additional INR 310 million (USD 4.3 million) to Svasti Microfinance, a provider of loans and payment services to 188,000 customers in India, mostly women. The investors are the Nordic Microfinance Initiative (NMI), a Norway-based public-private partnership; Adar Poonawalla, an Indian philanthropist; and Rajiv Dadlani Group, an Indian family office. The breakdown among the investors and the sizes of their holdings remain confidential.

“We have built a great organization with over 800 employees who are all very excited to receive such strong support and validation from our existing investors during these difficult times…. This round of investment…motivates everyone associated to achieve our mission of fulfilling every woman’s right to finance and help transform the lives of their families as well,” said Svasti Co-Founder Arunkumar Padmanabhan.

Svasti reports having rebuilt its repayment rate to 94 percent since the lockdowns that were called early in the COVID-19 pandemic. Via 63 branches in four states, it offers group microenterprise loans of INR 20,000 (USD 275) to INR 80,000 (USD 1,100) and individual business loans of INR 100,000 (USD 1,400) to INR 500,000 (USD 6,900). Borrowers of either loan type also are eligible for bill payment services and “short-term” consumer loans. For the year ending March 2020, Svasti generated profits of INR 88 million (USD 1.2 million) on total assets of INR 3.8 billion (USD 52 million). The firm’s loan portfolio totals INR 4 billion (USD 55 million) as of 2021. While its primary investors remain NMI and Adar Poonawalla, Svasti’s other investors include Indian investor Sajid Fazalbhoy, Kayenne Ventures of Singapore and the family office of India’s Arihant Patni.

NMI was founded in 2008 with the goal of creating jobs and wealth via financial inclusion. The organization reports financial returns of approximately 4 percent per year via five funds holding aggregate assets of USD 370 million. These funds have 19 active investments in equity and debt plus seven in third-party funds. The 19 direct investments are in institutions serving 10 million clients, of whom 80 percent live in rural areas and 95 percent are women. NMI is one-third owned by: (1) Norfund, which is backed by the government of Norway; (2) the Danish Investment Fund for Developing Countries, which is known by its Danish acronym IFU; and (3) a group of five private companies.

Sources and Additional Resources

Svasti press release
https://www.svasti.in/2021/03/svasti-raises-inr-310-million-from-internal-investors/

NMI homepage
https://www.nmimicro.no/

Adar Poonawalla homepage
https://adarpoonawalla.com/

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