Finnfund and FMO back SATYA MicroCapital with USD 35 million to make formal finance more accessible to women in India

(MENAFN- Cision) Finnfund, the Finnish development financier and impact investor, and FMO, the Dutch entrepreneurial development bank, have announced a USD 35 million debt funding to SATYA MicroCapital Ltd, a Delhi-based RBI registered NBFC-MFI which provides affordable microcredit to women from low-income households across the rural areas of India. Finnfund invested in a USD 10 million ECB facility, with FMO providing a USD 25 million debt facility in the local currency. The company contributes to women empowerment by generating additional income earning opportunities and providing a more affordable alternative to informal finance with high interest rates.
“SATYA is an important enabler of financial inclusion, and we are happy to establish a new partnership with them”, says Finnfund’s Investment Associate Kyaw Latt. “We have been impressed by their growth and the way they integrate modern technology into their microfinance operations. The company’s commitment to social mission and empowering women is well aligned with Finnfund’s aim to promote gender equality and strengthen women’s financial independence, especially among the traditionally underserved population in India.”
Aleksandra Gazy, Investment Officer at FMO, added, “We are thrilled to be supporting together with Finnfund our new MFI client SATYA with this high-impact transaction. Labelled as 100% Reducing Inequalities and 20% Green, the funds have been earmarked to fund women and youth financing, thereby promoting gender equality and female empowerment. By empowering aspiring women entrepreneurs with increased credit access and digital literacy trainings, SATYA clearly exemplifies the importance of providing both financial and non-financial support to improve the livelihoods of the underbanked across India. We look forward to jointly contributing to the inclusive sustainable development of the Indian economy together with SATYA.”
Vivek Tiwari, MD, CIO & CEO of SATYA MicroCapital says, “The client base of SATYA MicroCapital Ltd is predominantly formed by self-employed rural women nestled in rural and sub-urban terrains. The capital raised will be used in appropriate custom to expand our operations to a broader spectrum thereby providing the much-needed financial access to women micro entrepreneurs for their livelihood rehabilitation. It is a moment of sheer privilege for SATYA MicroCapital Ltd. We are extremely grateful for the unmatched belief Finnfund and FMO have bestowed in our organization. Receiving this sort of infusion validates the business model of any MFI complimented by an exponential boost in its confidence. Definitely this will strengthen investors' confidence in our dynamic and progressive business model in a much more intensive manner. This fiscal backing will indeed catapult SATYA to socio-economically uplift more than 75,000 households by furnishing affordable and accessible means of micro-credit.”
Many women in India lack access to formal finance: According to the World Bank, only 10% have borrowed from a formal financial institution. SATYA reaches out to rural women in their home villages and helps them access small finance. The clients have been able to increase their annual income by 11% after taking a loan from SATYA. Finnfund and FMO’s investment in SATYA is classified as a 2X Challenge eligible gender investment as the products offered are targeted to empower women and promote female entrepreneurship.
SATYA provides group loans, where family or friends are acting as co-borrowers for the loans. Like many other financial institutions in India, SATYA earlier required that borrowers should be married and widow members needed to have their son acting as a co-borrower. This policy was changed in this year and SATYA has worked on removing the marital status from loan eligibility and implementing changes in their operations to accommodate the policy change. “Including the previously underserved groups like unmarried women and widows is a big step both culturally and business-wise”, says Latt. “Both SATYA and we see the need for change and believe that expanding the client base will help SATYA achieve their vision of being a catalyst for the socio-economic improvement of 5 million households in India by 2025.”

MENAFN15062023005352011945ID1106442713