Japan-based Gojo & Company leads investment in women-focused Satya MicroCapital

Women-focused Satya MicroCapital Ltd has raised Rs 43 crore ($6.27 million) in equity funding led by new investor Gojo & Company, Inc., a Japan-based firm that holds stakes in microlenders, said a press statement released on Monday. 

Existing social-impact investor Dia Vikas Capital Pvt. Ltd also participated in the round, said New Delhi-based Satya MicroCapital. Through the round, Gojo acquired 25% stake in the microlender.

The lender aims to use the funds to expand its presence across its existing geographies as well as foray into new geographies and diversify its loan book.

Satya MicroCapital, which started operations in January 2017, provides loans to small entrepreneurs in both rural and urban areas. Its Joint Liability Group model mainly focuses on women, with their husbands acting as co-borrowers. A Joint Liability Group typically comprises of 5-10 individuals jointly seeking a loan. 

Satya MicroCapital has 55 branches across 55 districts in 11 states -- Assam, Bihar, Chhattisgarh, Haryana, Himachal Pradesh, Odisha, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal. It had a loan book of Rs 275 crore as on 31 July 2018, the statement said.

Vivek Tiwari, managing director and chief executive of Satya MicroCapital, was earlier chief operating officer at microlender Satin Creditcare Network Ltd.

For the funding round, Mumbai-based advisory firm for private equity investments, Vidura Capital, acted as Satya MicroCapital’s consultant.

In October last year, Dia Vikas Capital spent Rs 16 crore ($2.4 million) for around 25% stake in Satya MicroCapital. This was followed by Satya MicroCapital raising Rs 11.48 crore ($1.7 million) from existing investors through a rights issue in June 2018.

Gojo & Company is a Japan-based holding company of microfinance institutions. The company has subsidiary microfinance institutions in various countries such as Cambodia, Sri Lanka, and Myanmar. In India, Gojo & Company had invested in an Ahmedabad-based firm called Ananya Finance for Inclusive Growth Pvt. Ltd.

India’s microfinance industry, which has attracted loads of money from private equity, venture capital and social-impact firms, is thriving as growth in its total loan portfolio accelerated last year.

The total outstanding loan portfolio rose 27% to Rs 1,36,633 crore ($21 billion then) at the end of March 2018, a tad faster than 26% the year before, according to data collated by Microfinance Institutions Network.