Danish government’s investment arm has invested Rs.21 crore in New-Delhi-based micro finance institution Satin Creditcare Network Ltd. (SCNL) via a long-term Tier-II non-convertible debentures (NCDs) issue.
The money has come from Investment Fund for Developing Countries (IFU), a Danish government-owned investment fund, and is in the form of privately-placed, unsecured, sub-ordinated, rated, NCDs issued by Satin for tenure of just over 5 years.
Chennai-based IFMR Capital, which provides access to capital for institutions that lend to financially excluded households and businesses, arranged the deal. This is the first time that IFMR Capital is doing a Tier-II NCD issuance deal.
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The fund raise will help Satin significantly scale up its operations and expand its outreach to many more financially excluded households. SCNL provides loans to both urban and rural poor to meet their productive requirements in starting new business or for growing an existing business.
It has operations in Bihar, Chandigarh, Delhi, Haryana, Jammu, Maharashtra, Madhya Pradesh, Punjab, Rajasthan, Uttar Pradesh and Uttrakhand. “The successful completion of the Tier-II placement will open the market for long-term sub-ordinated debt products for the sectors that we work in. We hope to enable many more of such Tier-II issuances going forward,” Kshama Fernandes, CEO, IFMR Capital, said in a statement.
“We believe that the availability of Tier-II capital to high-quality micro-finance institutions such as like SCNL can change the landscape of lending to financially excluded households in India,”Deepa Hingorani, IFU, said
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“MFIs can use Tier-II debt to leverage on existing capital and make efficient use of this capital to expand their operations further,” he added