MICROCAPITAL BRIEF: Sonata Borrows $6m from MicroVest for Group Microlending to Women in Rural India

Sonata Finance, a provider of loans and insurance to women in India, recently borrowed USD 6 million from MicroVest, a debt-focused asset manager owned by US-based DAI Global. Founded in 2006, Sonata serves 700,000 borrowers on a cash-free basis via 460 branches. While most of the microfinance institution’s loans are to groups of women conducting rural enterprise, the institution also offers individual loans and serves small and medium-sized enterprises (SMEs). Its product menu includes loans for purposes such as motorbikes, appliances and home improvement. The loans, only some of which require collateral, range in size from INR 10,000 (USD 120) to INR 500,000 (USD 6,100) with terms of six months to three years, interest rates of 21 percent to 25.3 percent and fees of 1 percent to 1.5 percent.

MicroVest was founded in 2003 and specializes in channeling investment to funders of microenterprises and SMEs in low- and middle-income countries. The firm manages a portfolio valued at USD 519 million as of 2021.

Employee-owned DAI is active in 100 countries in areas such as “economic development, sustainable business, climate change and the environment, governance, gender, and health.” The firm has 16 offices and employed 5,000 people as of 2021.

Sources and Additional Resources

MicroVest press release
https://microvestfund.com/microvest-invests-in-sonata-finance-to-support-womens-economic-empowerment-financial-inclusion-in-india/

Sonata homepage
https://sonataindia.com

DAI homepage
https://www.dai.com

More content from MicroCapital on MicroVest
https://www.microcapital.org/?s=microvest

More content from MicroCapital on India
https://www.microcapital.org/?s=india

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