ACCION International recently invested USD 500,000 for a 49.5 percent equity stake in Saija Finance Pvt Ltd, [4] a microfinance institution (MFI) based in Northern India that started in April 2008. The investment was made through ACCION International’s ACCION Gateway Fund. [3] Saija is the fund’s fourth investment in India. Other recent investments in Indian MFIs include Swadhaar FinServe, [5] which caters to the urban poor, Lok Capital, [6] which serves social enterprises, and United Villages, [7] which focuses on the rural poor.
ACCION, which has been providing technical assistance in operations and management to Saija for the last year, plans to continue assisting the MFI in testing various technological services, such as mobile phone-based payments and point of sale (POS) terminals (or checkout systems). In the next five years, Saija aims to work in some of the poorest Indian states, including Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh and Uttar Pradesh, by providing services such as individual loans, microinsurance and remittances, financial literacy training, and consumer protection assessment through ACCION’s Center for Financial Inclusion.
About ACCION Gateway Fund:
The ACCION Gateway Fund, LLC invests directly in regulated microfinance institutions or non-profit organizations that are transforming into regulated microfinance institutions. ACCION aims to generate long-term capital gains and current income through investments in equity, quasi-equity and medium-term debt securities issued by microfinance institutions (MFIs), which are retail micro-lenders, in Latin America, the Caribbean, and India. The fund currently holds shares in MFIs in Bolivia, Columbia, El Salvador, Haiti, India, Mexico, Panama, Paraguay, Peru, and Venezuela. Notable investments have included the microfinance institutions Compartamos of Mexico and SogeSol of Haiti.
About Saija Finance Private Limited:
Saija Finance Private Limited is a Non Banking Finance Company that provides microfinance services to the poor in Northern India. Founded in April 2008, it aims to cater specifically to the states of Bihar, Jharkhand, Delhi, Rajasthan, Chhattisgarh and parts of Uttar Pradesh and Madhya Pradesh. Saija claims to currently have 2860 borrowers, total loans disbursed are equivalent to USD 1.2 million, and it has a gross portfolio of an equivalent of USD 256,597.It does not yet report to the MIX Market.
About Swadhaar FinServe Pvt Ltd:
Swadhaar FinServe is a subsidiary non-banking financial company of Swadhaar FinAccess that caters to the urban poor in India. According to the MIX Market, the clearinghouse for microfinance sector information, the company has a gross loan portfolio of USD 1.1 million, 8,234 active borrowers, and total assets of USD 2.1 million.
About Lok Capital:
Lok includes a venture fund, Lok Capital LLC, to invest in the growth of Indian microfinance institutions, as well as a not-for-profit US foundation that provides grants and volunteers for long-term MFI development. Lok Capital’s fund size is USD 22 million. Fund investors include ACCION International,CDC, Développement International Desjardins, FMO, IFC, KfW, and responsAbility.
About United Villages, Inc:
United Villages, Inc., based in Cambridge, MA (USA), operates a subsidiary called United Villages India to provide financial services to the rural poor in India. The company claims to “leverage existing wireless and transportation infrastructures to cost-effectively reach rural markets.” It does not yet report to the MIX Market, the clearinghouse for microfinance sector information.
Bibliography:
[1] Original Source Article: ACCION International Press Release: “ACCION Takes Equity Stake in Saija Finance, a Microfinance Institution Serving India’s Poorest”. http://www.accion.org/Page.aspx?pid=1867
[2] The Hindu Business Line: Accion Intl picks up 49.5% in Saija MFI. http://www.thehindubusinessline.com/2009/11/17/stories/2009111750850600.htm
[3] ACCION Gateway Fund, LLC. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=ACCION+Gateway+Fund%2C+LLC
[4] Saija Finance Private Limited. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Saija+Finance+Private+Limited
[5] Swadhaar FinServe: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Swadhaar+FinServe+Private+Limited
[6] Lok Capital: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Lok+Capital+LLC
[7] United Villages: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=United+Villages
Original Source Article:
ACCION International Press Release: “ACCION Takes Equity Stake in Saija Finance, a Microfinance Institution Serving India’s Poorest”
Boston, Mass./Bangalore, India, November 12, 2009 – ACCION International, a pioneer and leader in global microfinance, announced today that it has invested $500,000 for a 49.5 percent equity stake in Saija Finance Private Limited, a microfinance start-up that provides financial services to microentrepreneurs and low- and middle-income families in one of India’s most underserved regions.
The investment was made through ACCION’s equity investment arm, the ACCION Gateway Fund, and represents the fund’s fourth investment in India. Other Gateway investments in India include Swadhaar FinServe, Lok Capital and United Villages.
Based in the city of Patna, state of Bihar, Saija was founded by entrepreneurs and husband and wife team S.R. Sinha and Rashmi Sinha, and currently operates two branches in that city. Registered as a non-banking financial company (NBFC), it is the only Bihar-based microfinance institution, and serves the country’s poorest state. Bihar, with a per capita income of approximately $160, a 90 percent illiteracy rate, and 37 million of its 90 million people living below the poverty line, is one of the most densely populated agglomerations of poor people anywhere in the world, reports the World Bank.
Over the next five years, Saija plans outreach to households in several of the poorest states in India: Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh and Uttar Pradesh. Saija aims to serve 400,000 customers by 2014 with group and individual loans, microinsurance and remittances, and will also roll out financial literacy training, as well as consumer protection assessment work through ACCION’s Center for Financial Inclusion.
For the last year, ACCION has been providing technical assistance to Saija, primarily through the secondment of commercial and operations managers. Going forward, ACCION’s technical assistance will assist Saija in testing and deploying innovative technologies and delivery channels, such as mobile phone-based payment services or point of sale (POS) terminals. With its investment, ACCION will also play an active governance role in the organization, joining founders S.R. Sinha and Rashmi Sinha.
“Bihar faces some of the most extreme poverty in the world,” said Michael Schlein, president and CEO of ACCION. “It is a very difficult environment. And yet, in a relatively short time, Saija has shown that it has what it takes to thrive and innovate in one of the world’s most challenging markets. We’re delighted to partner with Saija in its drive to deliver a full array of financial services to a vastly underserved population.”
“As we ramp up our outreach to India’s poorest states, we are fortunate to have ACCION as a partner to help us grow in the right way, mindful of the needs of our customers and with the technical know-how to develop cutting-edge services tailored to those needs,” said S.R. Sinha, co-founder of Saija.
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