Satya MicroCapital Limited
Status: Approved investmentWhy disclosure?
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Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
Satya Micro Capital Ltd is a Delhi-based microfinance institution, registered as a non-deposit taking NBFC-MFI with the Reserve Bank of India. It is a digitally advanced and fast-growing MFI that employs the Joint Liability Group (“JLG”) model to provide unsecured microcredit to women borrowers, predominantly in the rural pockets of the country. Satya caters to almost 0.88mln borrowers through a network of 338 branches spread across 228 districts in 21 states, as of March 2022.
What is our funding objective?
Loan proceeds are used for the growth of the microfinance portfolio towards female or young microentrepreneurs, women-owned micro enterprises, supporting the themes of gender and inclusive finance. A fifth of the amount has been earmarked for Water Sanitation and Hygiene ("WASH") or other green qualifying products. WASH program of Satya provides access to affordable financing for potable water and sanitation facilities. Overall, the project contributes to decent work and economic growth, reducing inequalities and climate action.
Why do we fund this investment?
The Indian microfinance sector has grown multi-fold over the last two decades. However, at current level of 58m borrowers, it has crossed only one-third of the market penetration (industry estimates). SML has a resolute focus on empowering aspiring women entrepreneurs through credit access and livelihood strengthening. It has been successful in reaching out to the financially under-served population with more than 87% of borrowers residing in the rural hinterlands and 32% being first-time MF clients.
What is the Environmental and Social categorization rationale?
Satya is categorized as an FI-C client, given the size and purpose of the portfolio loans. FMO analyses risks from different perspectives and assessments. In case of microfinance investments, the E&S classification is typically low because the exposure generally is limited to retail and micro-entrepreneurs. The risks that might come with microfinance investments, such as, among other, over-indebtedness, transparency of interest rates, responsible pricing, is covered by FMO in other assessments such as Client Protection Principles (CPPs). In case of high contextual risk, a human right assessment can be carried out.
More investments
| Date | Total FMO financing |
|---|---|
| 7/23/2024 | INR 2075.00 MLN |
- Region
- Asia
- Country
- India
- Sector
- Financial Institutions
- Publication date
- 12/9/2022
- Effective date
- 3/10/2023
- Total FMO financing
- INR 2050.00 MLN
- Funding
- FMO NV
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Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - C