By Subramaniam Sharma, Bloomberg
New Delhi: New Zealand billionaire Christopher Chandler’s Legatum group has bought a stake in Share Microfin Ltd. for Rs1 billion to gain from lending to the country’s poor.
Legatum, which says it has spent $1 billion on developing India’s financial industry over the past three years, has purchased a “majority interest” in Hyderabad-based Share Microfin, the Dubai-based group said in a news release. It did not provide details on the holding.
Microfinance lenders in the world’s second-most populated country seek to expand their reach and gain from faster economic growth as the incomes of the poor are expected to rise. The number of poor, or households with income less than $5.4 a day, is estimated to drop to 22% by 2025 from 54% in 2005, McKinsey & Co. says.
“Legatum’s investment will help to provide the scale necessary to lower costs and increase choices for India’s rural poor,” Mark Stoleson, president of Legatum, said in the news release. “India’s microfinance industry is evolving rapidly, with greater professionalism, increased efficiencies and lower costs.”
Share Microfin, set up in 1989, has more than 1 million customers in 8,000 villages, the news release said. It has a total outstanding loan portfolio of more than $95 million. The company has 312 branches in five states and employs 2,300 people.
The money invested by Legatum will help Share Microfin increase the amount of loans it gives to $600 million by 2012 and raise the number of clients to 6 million, Udaia Kumar, chairman and managing director of Share Microfin said.
Legatum was advised by Intellecap Pvt. Ltd., based out of Mumbai and Hyderabad, the company said.
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-0- May/16/2007 03:53 GMT