Mumbai: Suryoday Small Finance Bank Ltd has raised 248 crore from a clutch of investors including development finance institution DEG, a subsidiary of Germany’s KfW Group, and Kotak Mahindra Life Insurance Co.

Suryoday Small Finance Bank (SFB), which initially provided microfinance loans, has diversified its product offerings to include retail loans such as home loans, commercial vehicle loans, and secured and unsecured loans. It operates across 10 states and Union territories through a network of more than 380 branches and doorstep centres.

The SFB’s loan portfolio stands at 2,900 crore. It has a deposit base of 1,500 crore.

The fundraise also saw capital infusion from the bank’s promoters and its 13 existing investors, including Sarva Capital, HDFC, IFC, IDFC Bank, Gaja Capital and ASK Pravi.

In 2017, the SFB had raised around 160 crore.

Following the latest round of fundraising, the bank has 20 institutional investors with a healthy mix of institutional investors, development funds and private equity investors.

“In this financial year, the focus will be not just to deliver excellent customer experience, but also to create delight or wow factors for all the segments we cater to, through technological initiatives and innovations. This growth capital comes in just as we start the new financial year and provides us with a strong backing to pursue our business plans," said R. Baskar Babu, managing director and chief executive officer, Suryoday SFB.

Suryoday was one of the 10 institutions that had received in-principle approval from the Reserve Bank of India (RBI) in September 2015 to start a small finance bank.

The purpose of small finance banks is to expand access to financial services in rural and semi-urban areas. They offer basic banking services, accept deposits and lend to the underserved sections of society, including small businesses, small and marginal farmers, micro and small industries, and entities in the unorganized sector. It had started its banking operations in January 2017.

Many of the larger small finance banks, such as AU Small Finance Bank Ltd, Equitas Holdings Ltd and Ujjivan Financial Services Ltd, have gone public to raise funds.

In June 2017, AU Small Finance Bank had launched a 1,900-crore initial public offering (IPO), while Equitas and Ujjivan went public in April 2016 to raise 2,078 crore and 885 crore, respectively.

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