New Delhi: Satin Creditcare Network Ltd, a micro-finance institution that lends mainly to women from rural and semi-urban areas, said on Friday it had raised $9.4 million external commercial borrowing (ECB) led by Switzerland-based international impact asset manager, responsAbility Investments AG.
“We have been able to secure the senior loan with a bullet repayment schedule, in which we would pay the principal amount at the end of the three-year loan term, while the interest would be repaid on a half-yearly basis. The overall cost of borrowing, including the hedging cost and interest rate, is at 11.5%," according to Jugal Kataria, chief financial officer of the company.
The funds, Kataria said, will be used to grow the assets under management of the Gurugram-based lender by 35% at the end of the ongoing financial year. The firm’s AUM grew 23% to ₹7,068 crore as of fiscal year ended 31 March 2019, compared to the year-ago period, according to the company’s website.
“We would also aim to double the amount of loans disbursed over three years," he added. The company’s gross loan portfolio grew 25% to ₹6,374 crore in FY19, against the previous fiscal.
This is the second round of foreign funding for the micro-financier, which raised $10 million in debt funding from the US-based commercial finance company World Business Capital four years ago.
“We are grateful to ‘responsAibility Investments AG’ for their continued belief in us and the MFI sector, as we are an important source of credit for the unbanked borrowers. These investments will help us manage our medium term funding and also help in our liability mix," said HP Singh, chairman and managing director of SCNL.
We are also planning to expand our geographical footprints and these investments will help us boost the process. " he added.
The funding is part of responsAbility Investments AG’s $175 million round of debt funding given to microfinance and SME-finance institutions in emerging markets, according to its July 17 press statement. The proceeds were used to fund financial intermediaries providing capital to 30,000 small businesses and 5.6 million microfinance borrowers, with 81% of the borrowers being women.