Mumbai: Janalakshmi Financial Services, India’s largest microfinance company, on Monday said it has raised Rs1,030 crore in equity capital from existing and new investors to fuel growth and begin small finance bank operations.

TPG, an investor, led the latest round along with Treeline, a Morgan Stanley Asia-managed private equity fund, QRG Enterprises Ltd and Enam Group’s Vallabh Bhansali.

Bajaj Allianz Life Insurance Co. Ltd and Bajaj Allianz General Insurance Co. Ltd are the new investors in the company.

The company will begin operations as a small finance bank in December and offer affordable housing loans from the first quarter of 2018, said Ajay Kanwal, chief executive of Janalakshmi Financial Services.

“In three to five years, small batch loans will constitute 50-60% of portfolio while rest will comprise gold loans, affordable housing and entrepreneurs’ loans," Kanwal said in a phone interview.

The company plans to convert 300 of its 500 collection centres into bank branches by 2018, the company said in a statement.

Post-demonetisation, microfinance institutions (MFIs) have seen a deterioration in asset quality. Industry experts believe the industry will take an 8-10% hit on the total loan portfolio. The gross loan portfolio of micro loans at the end of the June quarter stood at Rs1.06 trillion, according to a Microfinance Institutions Network (MFIN) report.

Janalakshmi had a gross loan portfolio of Rs12,551 crore at the end of the March quarter. In a bid to improve its collection ratios, the company has hired 2,000 new loan officers after the December quarter.

Close