Pune-based non-banking finance company has raised Rs 7 crore ($1.29 million) from Housing Development Finance Corporation Ltd (HDFC), India’s largest mortgage lender.

“We are happy to have the HDFC Group as a long-term investor in our company and this investment will enable us to pursue our goal of providing comprehensive financial services to the economically challenged segment of the population,” said R. Baskar Babu, CEO of Suryoday Microfinance.

Commenting on the investment, Amitabh Chaudhry, managing director & CEO of HDFC Life, said, “Investing in Suryoday is a strategic initiative for HDFC Life, as it provides us a strong opportunity to extend the distribution network of our products and ensure that our insurance solutions reach the economically challenged segment.”

Promoted by three bankers, R Baskar Babu, VL Ramakrishnan and Ganesh Rao, Suryoday provides loans to women belonging to economically weaker sections, those below the poverty line and the marginal poor who do not have access to traditional banking.

Currently, the firm operates in 14 districts of Maharashtra, Tamil Nadu, Gujarat, Orissa and Karnataka. It has 31 branches, over 132,000 customers and a loan portfolio of Rs 105 crore. Suryoday also aims to cater to one million households by 2014. Aavishkaar Goodwell and Lok Capital are the existing investors in the MFI. The firm also has partnerships with Atyati, IFMR Capital, Process Consulting and Kotak Life Insurance, among others.

In May 2009, Aavishkaar Goodwell India Microfinance Development Co. Ltd, a fund managed by Aavishkaar Venture Management Services, had invested $0.93 million in Suryoday Microfinance and in Aug 2010, it further invested $4.48 million, along with Lok Capital I, a fund managed by Lok Advisory Services Pvt Ltd.

(Edited by Sanghamitra Mandal)

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