UK's CDC Group Invests Rs 320 Crore in Pooled Bond Issuance of 6 Indian MFIs
India, March, 31 2021 -
CDC Group, the UK government's development finance institution, invested Rs 320 crore in a pooled bond issuance of as many as six Indian microfinance lenders including Annapurna Finance, Arohan Financial Services and Fusion Microfinance.
The investment -- the first ever by CDC in a pooled bond structure -- is aimed at providing systemic liquidity to these lenders.
ASA International, Asirvad Microfinance and Chaitanya India are the other lenders which raised money through the deal jointly structured by CDC and Chennai-based Northern Arc Capital. The investment is supported by partial guarantee provided by Northern Arc.
This investment is expected to support these MFIs in providing over 6.30 lakh new micro-loans to low-income households -- primarily female and rural borrowers.
"The structure has enabled originators to efficiently access a global DFI and avail long tenor debt on their balance sheet," Kshama Fernandes, chief executive officer of Northern Arc said: "We see this as a beginning of a long-term partnership that will enable our clients to raise capital through cycles.”
CDC Group is UK’s first impact investor supporting the sustainable, long-term growth of businesses in South Asia and Africa.
"We expect that this would be the first of many other similar structures in which CDC would invest in future," Srini Nagarajan, managing director and head of Asia at CDC said.