Accion International invests in Bihar-based Saija Finance

By Sarimul Islam Choudhury (VCCircle.com)

Accion Gateway has earlier invested in Lok Capital, Swadhaar FinServe Pvt Ltd and United Villages in India.

In one of the rare microfinance deals in Northern India, Accion International, a Boston-based non-profit organisation investing in microfinance institutions globally, has picked up 49.5% equity stake in Saija Finance Pvt Ltd for $500,000. Accion has invested through its equity investment arm, Accion Gateway Fund, and it is its fourth investment in India. Unitus Capital was the financial advisor on the transaction.

Saija Finance is a Patna-based microfinance start-up, which provides financial services to micro-entrepreneurs, and low and middle-income families in India. The company believes the funding will help it expand its services in other states as well. “We plan to offer individual and group loans to over four lakh people by 2014, and roll out financial literacy training as well,” said the company in a statement.

Currently, Saija Finance is operational in Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh and Uttar Pradesh. This will be the first instance of private equity investment in Bihar.

Most of the microfinance deals have been in South India spread across Andhra Pradesh, Karnataka, Tamil Nadu and Kerala. In July this year, Allahabad, Uttar Pradesh, based MFI Sonata Finance raised capital from India Financial Inclusion Fund. Some of the other North based MFI deals include Dia Vikas Capital's investment in Arth Finance and Motilal Oswal Venture Capital's investment in AU Financiers, both based in Rajasthan.

Accion Gateway has been active in India and its portfolio companies include Lok Capital, Swadhaar FinServe Pvt Ltd and United Villages. Lok Capital, a Mauritius-based venture capital fund investing in MFIs in India, raised $2.5 million from Accion Gateway in 2007. Swadhaar FinServe Pvt Ltd, a Mumbai-based MFI, raised $3 million from a joint investment made by Michael & Susan Dell Foundation, Accion and Unitus Equity Fund, while Gateway's investment amount in United Villages is not known.

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