Microfinance firm CreditAccess Grameen Ltd., said on Wednesday that it has acquired Madura Microfinance Ltd, and will eventually merge it into its own business.
CAGL will first acquire a 76.2% stake in MMFL from its existing shareholders for cash, and later merge the businesses and acquire a 100% stake, giving MMFL shares of the acquirer instead.
The transaction is subject to regulatory approvals.
CreditAccess said in an exchange filing that the acquisition will help build a large microfinance firm, and gives it access to 11.1 lakh borrowers and 430 branches of Madura Microfinance, as on September 30, 2019.
It strengthens CAGL’s leadership position in the microfinance market with a combined portfolio of Rs9,958 crore, 37 lakh borrowers and over 1,300 branches spread across 13 states and 1 union territory in India.
For the quarter ended March 31, 2019, CAGL’s profits fell to Rs76.3 crore on a revenue of Rs335.5 crore, compared to a profit of Rs99.74 crore on a revenue of Rs349 crore for the preceding December quarter.
Mr. Paolo Brichetti, Chairman, CAGL, said, “The acquisition underpins our mission to be the preferred business partner of low-income households lacking access to credit. It strengthens our microfinance franchise which can be leveraged to provide innovative financial services and products matching the evolving needs of under-served and unbanked households.”
Madura Microfinance was founded in 2005 by late banker-turned-entrepreneur K.M. Thiagarajan and is now run by his non-resident Indian, neuroscientist daughter Tara Thiagarajan. It counts impact investor Elever Equity as a key shareholder.