Smile raises Rs 50 cr from equity funds

Chennai-based microfinance company, SMILE Microfinance Ltd (Smile) has raised around $10 million (around Rs 50 crore) from equity funds managed by Developing World Markets (DWM), a US-based social investment fund manager. Grameen Capital India was the sole advisor to this transaction for Smile.

Smile has cumulatively disbursed over Rs 700 crore since inception, and at present has a clientele of three lakh households, said Sethuraman, chairman, Smile. The company, which caters only to women, reported a recovery rate of around 99.98 per cent. In Tamil Nadu, it has 6,000 centres.

Sethuraman said this was Smile’s first round of external equity financing. The proposed equity would help the company to reach its target of Rs 1,500 crore and 1 million members over the next three years, he added. Currently, Smile has total equity of around Rs 60 crore, including promoters' Rs 10 crore.

“This would allow us to mobilse Rs 700-800 crore fund,” Sethuraman said. The company has also urged the Government to pass the Microfinance Bill. “This will not only allow regularise the industry, it will also help companies like us to access foreign fund at a low interest rate.”