Ex-Bankers formed MFI receives Rs 4.5 cr from Aavishkaar Goodwell

SMF will be the first MFI in India to secure equity funding prior to the commencement of its ops.

Pune based Suryoday Microfinance (SMF), a micro finance company led by three former bankers, has received an equity investment of Rs 45 million from Aavishkaar Goodwell India Microfinance Development Company.

An interesting point to note is that this would be the first MFI in India to secure equity funding from an institutional investor prior to the commencement of its operation.

Also, Pune is relatively an untapped market as far as microfinance investing is concerned.

The MFI firm, which got RBI license as an NBFC in April, has managed to reach a cumulative loan disbursement of Rs 2.68 Crores to 2715 customers till June. It has opened six branches in Pune.

In a press statement, R Baskar Babu, Co-founder & CEO of Suryoday Microfinance, said, “The support from Aavishkaar Goodwell has enabled us to get started on this venture.

This partnership will help us achieve our dream of creating a world class financial services company for the economically challenged women. We want to grow this venture with continuous focus on making a positive social impact.”

Vineet Rai, Managing partner, Aavishkaar Goodwell, stated, “Aavishkaar Goodwell is committed to supporting early stage microfinance institutions through its strategic partnership with Intellecash.

We are excited about our partnership with Suryoday on account of its excellent management team with a strong social consciousness and focus towards under-served areas.”

Aavishkaar Goodwell is a joint initiative of the teams behind Aavishkaar India, the world’s first for-profit microventure capital fund; and Goodwell, a Dutch microfinance investment company funded by social investors and pension funds.

SMF commenced its operation in May 2009 in Pune, Maharashtra and plans to expand to other states of India in the medium term. It is led by three former bankers – Baskar Babu, Ganesh Rao and VL Ramakrishnan.

The dealflow in microfinance has only gotten stronger with investors looking at investing in Tier III towns. MFI has seen the most active venture capital dealflow within the banking and financial sector since January 2008. Of about 50 private equity deals worth $1 billion in banking and finance in the last 18 months, MFIs alone accounted for 20 deals worth over $200 million of Rs 960 crore.

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