MICROCAPITAL BRIEF: Sindhuja Microcredit of India Raises $8.7m in Equity Sale to Carpediem Capital, Nordic Microfinance Initiative

The majority owners of Sindhuja Microcredit, a lender to women in India, recently sold minority shareholdings to Carpediem Capital, an India-based private equity fund manager, and the Nordic Microfinance Initiative (NMI), a public-private partnership based in Norway, for a total of USD 8.7 million. The sizes of the stakes have not been released. Carpediem also invested USD 4 million in Sindhuja in 2019. India’s Vidura Capital served as advisor on the transaction.

The promoters of Sindhuja, Abhisheka Kumar and Malkit Didyala, issued a statement that, “Our customers, self-employed rural women, are the most vulnerable in the COVID–19 world… with their livelihoods under direct threat, this funding will be used to scale our operations and provide much needed financing to these women micro-entrepreneurs.”

Since its founding in 2018, Sindhuja has served 84,000 women entrepreneurs through 56 branches in rural areas of five states in northern India. It disburses loans ranging in size from INR 15,000 (USD 200) to INR 40,000 (USD 530) with terms of 14 to 24 months. The interest rate is 24 percent plus a fee of 1.2 percent and the cost of mandatory loan insurance, which is about 2 percent of the loan amount. Sindhuja holds assets of INR 1.7 billion (USD 22 million). As of January 2020, the microlender reported provisional 9-month return on assets of 3.4 and return on equity of 15.2 percent.

Carpediem, which is “focused on the India consumption opportunity through investments in emerging SME (small and medium enterprise) leaders,” holds investments in eight firms, dating back to 2015. Financial data on the firm are not available.

NMI was founded in 2008 with the goal of creating jobs and wealth via financial inclusion. It is owned by several private firms and two government-backed institutions, Norway’s Norfund and the Danish Investment Fund for Developing Countries, which is known by its Danish acronym IFU. NMI’s five funds hold aggregate assets of USD 280 million as of 2020, including debt and equity placements in 29 MFIs that reach 9 million people, of whom 90 percent are women. These funds have generated returns of 3 percent to 6 percent.

Sources and Additional Resources

Direct contact with NMI

NMI press release
https://www.nmimicro.no/news/nmi-invests-in-sindhuja-microcredit-an-early-stage-mfi-in-india/

Economic Times article
https://economictimes.indiatimes.com/small-biz/startups/newsbuzz/norways-nmi-carpediem-invest-in-delhi-based-sindhuja-microcredit/articleshow/75676625.cms

Sindhuja homepage
https://www.sindhujamicrocredit.com/

Carpediem Capital homepage
http://carpediem-capital.com/

Vidura Capital homepage
http://viduracapital.com/

More news on social finance in India
https://www.microcapital.org/?s=india

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