Microfinance Focus, January 11, 2012: Based on the recommendations of Foreign Investment Promotion Board (FIPB), Government on Tuesday cleared the proposal of Chennai-based Equitas Micro Finance involving a foreign direct investment of Rs. 230.70 crore ($44.5 million).

The Government has allowed Equitas to de-merge its microfinance business with its wholly-owned subsidiary. Post the de-merger, the activity of the company will be that of a NBFC-core investment company.

Set up in 2007, Equitas is a non-deposit-taking non-banking financial company, lending to women organised into joint-liability groups. Equitas had cumulative disbursements of Rs.21.1 billion as on September 30, 2011. It had 281 branches, with about 1.3 million borrowers and a portfolio outstanding (based on assets under management) of Rs.6.8 billion as on that date.

Equitas reported a profit after tax of Rs.0.30 billion on a total income Rs.2.38 billion for 2010-11, compared with a PAT of Rs.0.22 billion on a total income of Rs.1.24 billion for the previous year.