India Financial Inclusion Fund to invest in Sonata, Allahabad-based microfinance institution

Microfinance Focus, July 24, 2009: India Financial Inclusion Fund (IFIF) has decided to invest in Sonata Finance Private Limited, a microfinance institution in Uttar Pradesh, in the near future though it did not specify the amount.  Set up in August 2008, the fund is advised by Hyderabad-based Caspian Advisors Private Limited. The fund focuses on making equity investments in microfinance institutions in India, said a press release.
Sonata Finance, started in 2006, has so far reached about 85,000 women clients in 15 districts of Uttar Pradesh with a portfolio outstanding of over Rs. 42 crores in loans to the poor.
S. Viswanatha Prasad, Managing Director of Caspian, said: “Sonata is one of the most impressive and efficient microfinance institutions in the region, both financially and socially. We would like to reiterate our continued support in Sonata’s sustainable financial success, commitment to transparency, and innovative social leadership in the sector and are pleased to partake in the strategic growth of the institution.”
This was the second instance of fund rasing by Sonata from the Caspian-managed funds in India. Earlier, it had raised fund from the Bellwether Microfinance Fund, India’s first domestic microfinance fund for the private sector, also managed by Caspian.
Sonata’s CEO, Anup Kumar Singh said, “Caspian, intrinsically linked to Sonata’s foundation, has continued to envision Sonata’s future, supporting our strategic achievements along the way. Our relationship is a great example of qualified-MFI practitioners coming together with a team of people who understand the capital markets, while mutually sharing a compatible social agenda.”
This is the second deal reported in a week by the microfinance sector. On Monday, Pune-based Suryoday Microfinance reported that it had raised Rs 4.5 crore from Aavishkaar Goodwell Fund.

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