India: RGVN Microfinance Raises about Rs 42 Crore in Fresh Round of Equity Funding

Jul 2014
India, July, 15 2014 - Microfinance institution RGVN (North East) Microfinance has raised about Rs 42 crore from a fresh set of investors, led by Norwegian Microfinance Initiative (NMI) Fund III, the Guwahati-headquartered micro-lender announced on Tuesday.

The latest round of equity funding also saw global co-operative and social investor Oikocredit participate in the transaction, the proceeds of which will be used to ramp up RGVN's lending activity.

Additionally, the MFI's existing backers Dia Vikas Capital has also invested to buy additional shares, while SIDBI has converted its optionally convertible preference shares to equity in this round. Prior to this round, the micro-lender had raised about Rs 32.5 crore from investors.

"NMI shares the same objectives as of RGVN - providing financial and non-financial services to clients in the under-penetrated region. RGVN is having significant positive financial and social impact in North East India," said Njord Andrewes, investment director at NMI.

As of March 31, 2014, RGVN, which has 107 branches spread across the five North East states of the country, had a loan portfolio of Rs. 125 crore, serving over 1.6 lakh customers, according to a press statement released by the microfinance institution.

"We strongly believe that the company will achieve the growth numbers it has projected benefiting more low income communities in the region," said Alexander Remy, equity officer, Oikocredit.

Unitus Capital acted as the exclusive financial advisor to the company for this transaction.

RGVN's core products include loans for income generating activities through JLGs, larger individual loans for micro-businesses and subsidized loans for welfare purposes such as health and sanitation.

It also offers credit-plus services, including insurance for both life and assets and trainings on vocational skills to support various livelihoods activities and building linkages with external agencies to meet client needs in different areas like financial literacy, education and health.

"We are optimistic that this equity raise will help us to reach out to more underprivileged, thus boosting the region's growth," said Rupali Kalita, managing director at RGVN Microfinance.

Established in 2013, the NMI fund III, which was launched with an initial fund size of $31 million (Rs 186.4 crore), is the successor of NMI Frontier Fund and invests in microfinance institutions through debt and equity instruments.

Limited Partners in NMI Fund III, include social impact-focused investors such as Norfund, Ferd, KLP, Storebrand and DNB.


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