Grameen Financial Services Private Limited (GFSPL), a microfinance institution (MFI) headquartered in Bangalore, has raised debt funds to the tune of ₹250,000,000 (about $5 million) from Social Investments AG via secured, redeemable, non-convertible debentures (NCDs).
Popularly called as Grameen Koota, the firm which has over 400,000 members, has its main focus on the rural poor by providing funds and working towards improving their impoverished conditions through various educational and awareness programs.
In a press release issued last Wednesday, Suresh Krishna, Managing Director, Grameen Koota said, "This transaction is another milestone for Grameen Koota and is very critical given the current phase of the industry. This transaction will help improve our liquidity situation and disburse loans to many of our long standing waiting borrowers. This NCD investment from a leading impact investment firm in our company is a demonstration of faith on the performance of company's commitment to financial inclusion."
Eric Savage, President & Co-Founder of Unitus Capital, which acted as the sole advisor to the MFI, believes that that microfinance firms will grow at large, with a strong inflow of funds expected for this sector.
"Grameen Financial is a pioneer in the sector and it is fantastic to have seen their portfolio witness a strong growth over the last one year - these are definitely encouraging signs for the entire sector. We are delighted to continue our association with Grameen Financial and assist them in raising long term debt capital through the NCD route," Savage said in a press statement.
In 2010, GFSPL managed to raise ₹200,000,000 in debt funds, while last February, the firm raised it to around around ₹350,000,000.
Meanwhile, the firm may soon be converted into a non-banking finance company, upon receiving clearance from the country's central Reserve Bank of India.