Grameen Koota Financial Services Pvt. Ltd, a mid-sized microlender from Karnataka, has received a commitment for $20 million in debt investment from International Finance Corp., the private lending arm of the World Bank.
Grameen Koota, founded in 1999 by Vinatha Reddy and Suresh K Krishna, was earlier part of a micro-lending project under T Muniswamappa Trust, a non-governmental organisation. It was subsequently converted into a non-banking financial corporation (NBFC) in 2006-07.
IFC’s investment will be in the form of senior debt investment, through subscription of non-convertible debentures issued by Grameen Koota, it said in a filing.
The funds will be used by the NBFC to diversify its sources of funding and to expand the outreach of access to microfinance to borrowers who have little or no access to formal sources of financing, particularly in central and western parts of India.
The Bangalore-based organisation is currently the sixth largest micro-finance provider in India, with a loan portfolio of $272 million. It has a presence in five states — Karnataka, Maharashtra, Tamil Nadu, Madhya Pradesh and Chhattisgarh — with 298 branches.
As of 31st December 2015, the shareholders of the Company include promoters (7.7 per cent), CreditAccess Asia NV. (81.2 per cent), Creation Investments Social Funds II (10.23 per cent) and employees (0.87 per cent).
CreditAccess Asia NV is a holding company incorporated in Netherlands with interests across several Asian microfinance institutions such as Grameen in India, One Puhunan in Philippines and Bina Artha in Indonesia and a minority interest in Equitas Holdings Limited in India. Its regional companies in Asia have a total portfolio of €240 million.
Grameen Koota had raised $9.7 million in Series C funding in 2013 from Creation Investments Capital Management, Incofin Investment Management and MicroVentures India. In the same year, Triodos Investment Management invested $8 million through convertible notes.