Pune-based non-banking finance company has raised Rs 20 crore ($3.7 million) from its existing investors Aavishkaar Goodwell and Lok Capital.
The funding will be used to strengthen its presence in Maharashtra, Tamil Nadu, Gujarat and Orissa, and also to expand into neighbouring states.
“Despite the fact that microfinance initiatives are over two-decade old in the country, financial inclusion is still a distant dream for many poor people,” said R. Baskar Babu, CEO of Suryoday Microfinance. “But the sharp rise in number of banks or financial institutions has not helped solve this problem adequately. The unbanked, underserved population is in dire need for inclusive growth. This is the reason why we, at Suryoday, work towards enhancing the income and asset ownership levels of these people. The measurement of our success is by the percentage of customers moving into formal channels like banks, to utilise both savings and credit facilities. We are happy with the new investment, as this endorses the faith that our investors repose in our model and performance,” he said.
Promoted by three bankers, R Baskar Babu, VL Ramakrishnan and Ganesh Rao, Suryoday provides loans to women belonging to the 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 across Maharashtra, Tamil Nadu, Gujarat, Orissa and Karnataka. It has 31 branches, more than 145,000 customers and a loan portfolio of Rs 115 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 Company Ltd, a fund managed by Aavishkaar Venture Management Services, invested $0.93 million in Suryoday Microfinance and in August 2010, it further invested $4.48 million, along with Lok Capital I, a fund managed by Lok Advisory Services Pvt Ltd.
In October last year, Suryoday also raised $1.3 million from HDFC, one of India’s largest mortgage lenders.
(Edited by Sanghamitra Mandal)