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 MicroCapital 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, new-age MFI that predominantly employs the Joint Liability Group (“JLG”) model to provide unsecured microcredit to women borrowers mostly in the rural pockets of the country. As of December 2023, Satya caters to almost 1.7 million borrowers through a network of over 580 branches in 25 states.
What is our funding objective?
The facility is structured as an investment into newly issued non-convertible debentures ("NCDs") having a total nominal value of INR 2,075,000,000 (~USD 25 million). An eighty percent (80%) of the subscription amount will be used for the growth of the loan book towards female and young sub-borrowers. The remainder twenty percent (20%) is earmarked for Water Sanitation and Hygiene ("WASH") products. The WASH program of Satya provides access to affordable financing for potable water and sanitation facilities. As such, the loan contributes to economic growth, reducing inequalities and climate action.
Why do we fund this investment?
The project improves access to finance for women and youth sub-borrowers who need credit assistance to support their income-generating activities. Satya has been successful in reaching out to a financially underserved population with 99% of borrowers being women and more than 88% residing in rural areas.
What is the Environmental and Social categorization rationale?
Satya has an E&S rating of C, 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 |
|---|---|
| 3/10/2023 | INR 2050.00 MLN |
- Website customer/investment
- https://satyamicrocapital.com/
- Region
- Asia
- Country
- India
- Sector
- Financial Institutions
- Publication date
- 3/8/2024
- Effective date
- 7/23/2024
- Total FMO financing
- INR 2075.00 MLN
- Funding
- FMO NV
-
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