India’s second-largest microfinance firm Satin Creditcare NetworkNSE -4.93 % has raised $15 million in external commercial borrowing (ECB) from OeEB, the Development Bank of Austria, reflecting overseas investors’ confidence on the sector that is undergoing several ups and downs. The investment amounts to nearly Rs 108 crore in rupee terms at current exchange of 71.7 per dollar.
The investment will support Satin’s planned expansion, portfolio growth and its efforts in increasing financial inclusion through its operations in 22 states. Satin’s outstanding loan portfolio stood at Rs 7,182 crore.
This will be the third round of ECB funding by a foreign institution in SCNL while showcasing their continuous interest in the company and the microfinance sector in India. The first ECB investment in SCNL was by World Business Capital and second investment was by responsAbility Investment. This is OeEB’s first investment in the MFI industry in India under the new ECB guidelines. OeEB works in developing countries and emerging markets and provides financing for sustainable economic development.
Satin Creditcare Network Limited is a leading microfinance institution (MFI) in India with presence in 22 states and about 83,274 villages. The company’s mission is to be the one-stop solution for excluded households at the bottom of the pyramid for all their financial requirements. It also offers a bouquet of financial products in the non-MFI segment (comprising of loans to MSMEs), a housing finance subsidiary, business correspondent services, and similar services to other financial institutions through Taraashna Financial Services Limited, a business correspondent company and a 100 percent subsidiary of SCNL. In April 2017, SCNL incorporated a wholly-owned housing finance subsidiary, Satin Housing Finance Limited for providing loans to the affordable housing segment. In October 2018, SCNL forayed into the digital lending space with “Loan Dost” to target millennials. In January last year, it received a separate NBFC license to commence its MSME business, Satin Finserv Limited.
“We are delighted that OeEB, Development Bank of Austria rest strong trust in SCNL by making us their first choice of funding in India. The funding from OeEB will help us to strengthen our ongoing credit lending services to a larger section of existing and potential customer base and accelerate our reach across India,” H P Singh, Chairman and MD, SCNL said.
“Increasing financial inclusion is one of our main strategic goals. We are therefore proud to work with SCNL – an experienced partner in the field of microfinance. Especially, women often have very limited access to financial services, which is why we are particularly happy that our funds will support female entrepreneurs and contribute to improving gender equality in India,” Sabine Gaber, Member of the Executive Board of the Development Bank of Austria said.
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