Microfinance Institution Ujjivan raises Rs 45cr through NCDs

Microfinance Focus, Aug 4, 2010: Bangalore based microfinance institution Ujjivan Financial Services Private Limited, has today raised Rs.45 Crores (USD 10m) by way of private placement of Non-Convertible Debentures (NCDs), Microfinance Focus has learnt.

Standard Chartered Bank is the sole book runner and lead arranger of the issue. The NCD is listed with Bombay Stock Exchange.

Speaking on the occasion, Mr. Samit Ghosh, Managing Director, Ujjivan said, “This comes at the right time and will help diversify our source of funding and reduce our dependence on bank funding”.

Ujjivan is aiming at benefitting from a lower cost of funding and diversified portfolio of debt funding with a greater capital market exposure, indicated Mrs. Sudha Suresh, Ujjivan’s Chief Financial Officer.

Complimenting Ujjivan for their quick response time and closing the transaction successfully, Mr. Joseph Silvanus, Regional Head-Development Organizations for  South & South East Asia, Standard  Chartered Bank, said, “This is another transaction in line with our philosophy of taking strong microfinance institutions to capital markets. We found a right partner in Ujjivan and successfully accomplished the transaction.

After the first year of profitable operations in 2009-10, Ujjivan reduced loan interest rates by nearly 2-3% p.a.  earlier this month. It is only the second MFI in the country to do so. “We are committed to our social mission and double bottom line, and must share our profitability in servicing the poor” Mr. Ghosh added.

Around 75 per cent of the loans are used for business and the rest are used for varied purposes like housing, education, healthcare and emergencies. Ujjivan operates across India in 18 states with 303 branches serving over 750,000 poor urban customers. It provides non-financial microfinance plus services through its partner NGO, Parinaam.

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