IFC commits $20m to India's Grameen Koota

IFC's investment will be made in the form of debt through nonconvertible debentures, according to a disclosure. Grameen Koota is seeking new capital in order to diversify its sources of funding and to expand its borrower base.

Founded in 1999 as a branch of non-governmental organization T. Muniswamappa Trust, Grameen Koota has nearly 300 branches in five states in India, and a borrower base of 1.2 million, mostly women. With a loan portfolio of INR1.8 billion, it is the sixth largest MFI in India. It primarily lends for income generation, education, family emergencies, home improvement and house construction.

Grameen Koota is also a registered non-banking finance company (NBFC) under the Reserve Bank of India (RBI). NBFCs have received favorable attention in recent years from India's government and regulators, as well as from development-focused investors such as IFC and CDC Group, which see them as useful tools for bringing India's large unbanked population into the traditional banking system. Registering as an NBFC allows an MFI to access funding from banks.

The company is owned by CreditAccess Asia, which first invested in 2007 and took a controlling stake in 2012. CreditAccess raised $30 million from Olympus Capital earlier this year to expand its microfinance operations in Asia; the company has interests in several Asian MFIs, including India's Equitas Holdings, which is also backed by IFC and other investors such as Creation Investments and Helion Venture Partners.

IFC has backed several Indian NBFCs in the past year, including mortgage lender Repco Home Finance, to which it committed INR2.7 billion earlier this month, and energy-focused firm PTC India Financial Services, in which it invested $35 million last June.

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• Topics
• South Asia
• Financials
• Expansion
• India
• NBFCs
• IFC
• Financial Services
• Growth capital