Hyderabad-based microfinance institution Bhartiya Samruddhi Finance Ltd (BSFL) has raised Series-B funding of Rs 50 crore ($10 million) from a group of investors such as Lok Capital LLC, Aavishkaar Goodwell India Microfinance Development Company and Small Industries Development Bank of India (SIDBI). The deal also involves partial exit for some of BSFL's initial investors through a secondary sale worth Rs 20.2 crore (more than $4 million) to the new investors. BSFL is promoted by BASIX group.
The microfinance institution's (MFIs) existing investors are IFC, Shorecap International Ltd, Stichting Hivos-Triodos Fonds, ICICI Bank Limited and HDFC. Intellectual Capital Advisory Services (Intellecap) was advisor on the deal.
BSFL started its operations in 1996. The MFI has a loan portfolio of Rs 462 crore ($92.4m) and a customer base of over 1.5 million. BSFL operates in 15 states across India and expects to reach 10 million clients by 2014.
"The capital infusion will enable BSFL to maintain its mission focus and leverage large borrowings, to expand its outreach rapidly, especially in under-served States like Jharkhand and Bihar and the Northeast," said RM Malla, chairman of SIDBI.
Private Equity's Growing Interest In Microfinance
Limited partners haven't turned their face against microfinance institutions yet. Probably no reason to do that with the rural economy shining. Most recently, Hyderabad based India Financial Inclusion Fund (IFIF) fund has raised $20 million in fresh capital, taking its total fund size to $58 million. Aavishkaar India Micro Venture Capital Fund also raised fresh capital of around Rs 23 crore from a group of investors earlier this year. Recently, SKS Microfinance also announced its mega close of fourth round of funding of $75 million.