FMO has invested in Indian microfinance company Equitas Holdings Pvt Ltd (“Equitas”).
FMO’s investment will support the Chennai-based company’s growth across the country and allow it to reach more poor and unbanked customers with a broader range of financial services. Equitas is one of the top 10 microfinance institutions (MFIs) in the country, with a borrower base of 1.5 million customers across eight states. The company has also recently expanded the financial services it provides by offering lending for affordable housing and financing for commercial vehicles. Since its creation in 2007, the company has grown rapidly to become one of the leading microcredit businesses in India.
FMO's investment is part of a financing package of US$36 million arranged by CDC (the UK DFI) and other investors. The company predicts that the new financing will: - help Equitas reach 5.5million customers by 2018 (up from 1.5 million today) across all three business units; - boost its loan portfolio to US$2 billion (from US$ 235 million); and - grow its network of branches from 350 at present to 825 in 2018
Equitas operates its three businesses through close to 350 branches across eight Indian states and one union territory. (Tamil Nadu, Maharashtra, Rajasthan, Karnataka, Gujarat, Madhya Pradesh, Chhattisgarh, Andhra Pradesh and Pondicherry.) Equitas has started operating in the area of affordable housing through Equitas Housing Finance Pvt Ltd and used commercial vehicle financing through Equitas Finance Pvt Ltd to cater to the relatively unbanked population in these financial services sectors.
Equitas is widely acknowledged for following best practices in responsible financing and corporate governance. The company was an early endorser of the Smart Campaign (www.smartcampaign.org) and has integrated robust systems on client protection. Equitas also provides a variety of corporate social responsibility benefits to its customers, such as vocational training as well as quality, affordable education for their children.
