MICROCAPITAL STORY: MicroVentures Reports Investments in Equitas Microfinance of India and Sahayata Microfinance of India, Caritas del Peru and Fondesurco of Peru

During March and April MicroVentures, a microfinance investment vehicle, reported four loans to the Consultative Group to Assist the Poor (CGAP) Microfinance Dealbook, a monthly report on microfinance capital market transactions. Two equity investments were made to Indian microfinance institutions (MFIs) Sahayata Microfinance Ltd and Equitas Microfinance Ltd in March of USD 3.7 million and USD 4.4 million respectively. MicroVentures also granted loans to Caritas del Peru of USD 1 million and to Fondesurco of Peru of USD 750,000 during April.

According to a press release from MicroVentures, Sahayata has been active in the Indian state of Rajasthan since 2007. It serves around 37,000 women clients and the USD 3.7 million increase in equity should allow Sahayata to reach 150,000 clients by March 2010. Sahayata Microfinance Ltd does not report to the MIX market, the microfinance information clearinghouse, so no further details are know about total assets or gross loan portfolio.

Equitas Microfinance Ltd, formerly known as UPDB Micro Finance, was established in 2007 in the state of Tamil Nadu and currently has 10 branches serving over 16,000 borrowers. It lends to women who are organized into joint liability groups and does not take deposits. The investment of an additional USD 4.4 million in March will strengthen MicroVentures partnership with Equitas, according to a recent press release. This increase in equity will fund expansion plans outside of Tamil Nadu. According to the MIX Market, as of 31 March 2008 the company reported total assets of USD 4.8 million, a gross loan portfolio of USD 4.2 million, and a debt to equity ratio of 66 percent. In March 2008 CRSIL, an Indian rating company and a division of Standard and Poor’s, rated Equitas ‘mfR4’, where ‘mrf1′ is the highest and ‘mrf8′ is the lowest rating. A recent MicroCapital Story details the completion of a microloan backed rated securitization worth USD 3 million for Equitas.

MicroVentures loaned USD 1 million to Caritas del Peru in April. Caritas is part of the Catholic Church and was founded in 1955 by the Peruvian Episcopal Conference. Caritas works in the poorest regions of Peru and has over 24,000 borrowers of which 73 percent are women. As at the end of December 2007 total assets were USD 17.7 million and the gross loan portfolio was USD 14.8 million. Return on Assets was 9 percent and the Debt to Equity ratio 47 percent (as report to the MIX market). No rating information is available.

Founded in 1994, Fondesurco is a nonprofit organization that specializes in microfinance. The loan from MicroVentures will support its activities to provide small loans in the rural south of Peru. According to the MIX Market, as of December 2007, Fondesurco had Total Assets of USD 4 million, a gross loan portfolio of USD 3.7 million and 2,815 borrowers. Return on Assets for the MFI was 9 percent and it had Debt to Equity ratio of 175 percent. Fondesurco received a rating of B+ in July 2008, up from a B in February 2007 from Planet Rating.

MicroVentures is an Italian based financial company.  It was incorporated in 2007 as MicroVentures SpA and specializes in the development of financial partnerships with MFIs. MicroVentures acquires shares or disburses loans to small and medium MFIs, assists with development of partner MFIs and provides complimentary advisory services. They focus on MFIs which target rural women and currently work in India, Peru and Ecuador. As of 31 March 2009 MicroVentures had reported to the MIX market that it had fund assets of USD 26.5 million. MicroVentures has three groups of investors; financial institutions which own a total of 20 percent, private foundations which own 30 percent and individual investors which own 50 percent. The financial institutions as at 30 October 2008 comprise of UBI – Banco di Brescia Spa, Fondazione Cassa di Risparmio di Trento e Rovereto, Oltre Sapa, Finanziaria di Valle Camonica Spa, ISA – Istituto Atesino di Sviluppo Spa, Finance & Development Srl and ISI Holding. The two private foundations are Fondazione Maria Enrica and Fondazione Peppino Vismara.

By Sally Levy, Research Assistant

Additional Resources:

MicroVentures: Home; Press Release: MicroVentures invests USD 3,7 million into Sahayata Microfinance Ltd: MicroVentures strengthens its partnership with Equitas Microfinance

CGAP Microfinance Dealbook: Link

Sahayata Microfinance Ltd: Home

Equitas Microfinance Ltd: Home

Caritas del Peru: Home

Fondesurco of Peru: Home

MIX Market: MicroVentures; Equitas; Caritas; Fondesurco

MicroCapital Story: Equitas Micro Finance Gets Transaction Securitized and Rated by CRISIL, Structured and Arranged by the Institute for Financial Management and Research 

 

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