Janalakshmi microfinance NBFC raises $10 million in second round

Microfinance Focus, March 8, 2010: Bangalore-based Janalakshmi Microfinance NBFC has announced the closure of fundrasing for its Series B amounting to $10 million. The fund was subscribed by Treeline Asia Master Fund (Singapore), Bellwether Microfinance Fund, Narayan Ramachandran, former J.P. Morgan head in India have committed the required amount. Grameen Capital India has acted as the sole advisor to the deal.

Janalakshmi is promoted by Ramesh Ramanathan, who returned to India over a decade ago after a successful banking career. Speaking on this transaction, Ramesh said, “It’s a validation of our approach to addressing issues of financial inclusion in a unique social business model, and are especially delighted have Treeline join our investor group. We look forward to executing on our ambitious plans and expand our urban footprint nationwide in the coming 12 months, within the rigorous institutional structure of a social business – doing justice to both aspects of the term.”

Janalakshmi Financial Services, with over 200 years of cumulative banking experience, including R Srinivasan, MD & CEO, a former civil servant with over three decades experience in banking and financial sector with ANZ Grindlays, Fitch Ratings and JP Morgan and VS Radhakrishnan, COO; veteran banker with over 25 years experience with HSBC and ING Vysya Bank.

Janalakshmi, literally means people’s wealth, has embraced market principles while pursuing a social objective. It has a 2-tier structure: a Section-25 not-for-profit holding company called Janalakshmi Social Services – in which all promoter stakes are held. Funds in Janalakshmi Social Services can only be used to address social issues; and a for-profit operating company for investors called Janalakshmi Financial Services, in the form of an NBFC urban microfinance institution (MFI), with the promoter stake held in the not-for-profit entity Janalakshmi Social Services. It is unique and the only MFI in India structured in such a manner, to keep the social mission intact.

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