Nordic Microfinance Initiative raises its investment in Svasti Microfinance


KOLKATA: Nordic Microfinance Initiative (NMI) has raised its investment in Mumbai-based Svasti Microfinance while Michael & Susan Dell Foundation and Bamboo Capital Partners have exited in a $10 million share sale which includes both primary and secondary deals.

The fresh investment has raised Mumbai-based microfinance’s net worth to Rs 100 crore and would provide headroom to meet growth plans till March 2021.

“We are ramping up our investments in Indian microfinance space,” NMI managing director Arthur Sletteberg told ET. “We are a long term investor and are very positive regarding growth in India as there is huge potential for financial inclusion.”

NMI has $50 million exposure to India’s six microfinance-oriented firms including the second largest Satin Creditcare Network, North East Small Finance Bank and Utkarsh Small Finance Bank.

The country’s microfinance industry has grown 43% year-on-year to Rs 1.91 lakh crore as on June with total loan accounts rising to 9.27 crore from 6.68 crore a year back amid challenges of tight liquidity, especially for smaller firms.

Svasti Microfinance’s chief executive Arunkumar Padmanabhan said that besides NMI, billionaire Adar Poonawalla, family offices of Nalwalas (Dubai), Kayenne Ventures (Singapore) and other investors led by the Rajiv Dadlani Group invested in this round. Till date, Svasti has raised total capital funds of $17 million.

The non-listed firm with an NBFC-MFI licence did not divulge details of shareholding.

NMI has first invested in Svasti in 2018 while Michael & Susan Dell Foundation and Bamboo Capital Partners were investors in Svasti since 2010-11, Padmanabhan said. Svasti was co-founded by Padmanabhan and Narayanan Subramaniam in 2010.

The MFI, with operations in Maharashtra, Gujarat, Madhya Pradesh and Uttar Pradesh has Rs 377 crore loan portfolio as on October, lent to 1.85 lakh borrowers. It aims to grow its loan portfolio to Rs 550 crore by FY20 and Rs 1100 crore by FY21.

The entire microfinance universe reflects the micro loans provided by banks, NBFC-MFIs, small finance banks and other non-government organisations. The aggregate loan portfolio of 54 NBFC-MFIs stood at Rs 56,827 crore at the end of June.