Indian MFI Ujjivan secures $25m in fifth round funding
Indian microfinance institution Ujjivan Financial Services has raised INR1.28 billion ($25.5 million) from seven investors in its fifth round of equity funding. Wolfensohn Capital Partners and Dutch development finance company FMO committed INR400 million and INR326 million, respectively, as new investors in the company.
Existing investors who also participated include Lok Capital, Sequoia Capital, Mauritius Unitus Corporation, Elevar Equity and Caspian Advisors. Kotak Investment Banking was the adviser and arranger of the transaction.
The additional capital will be used to increase Ujjivan's loan book from INR6 billion to around INR16 billion, enabling it to meet the Reserve Bank of India's 15% capital adequacy requirement for non-banking financial company microfinance institutions (NBFC-MFIs). The previous round of funding, which took place in 2009, saw Ujjivan's capitalization more than double to INR2.3 billion.
"This is the first investment for Wolfensohn in the Indian microfinance sector, endorsing our faith in the sector and in Ujjivan's financial inclusion model," said Sanjiv Kapur, managing director of Wolfensohn India Advisors.
Ujjivan, which started operations in Bangalore in 2005 and is a member of the Grameen Network, serves over one million urban and semi-urban poor customers in 20 states. It has 3,600 employees at 302 branches and has disbursed loans of more than INR28 billion with a repayment rate above 98%.
The company does not have a presence in Andhra Pradesh, one of the most concentrated areas globally for microloans. The region was hit by scandal last year after a spate of suicides by borrowers, allegedly in response to their being hounded by lenders. The events led Indian regulators to introduce measures to curb over-aggressive debt collecting procedures by MFIs. The problems stymied investment in the space.
More on South Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.