Bandhan to raise up to Rs 100 cr via NCD this fiscal

West Bengal-based Bandhan is planning to raise up to Rs 100 crore as non convertible debentures (NCD) by the end of this financial year.

This is a part of the MFI’s fund raising plans of Rs 2400 crore through debt this year. This represents about which is close to 30 per cent growth in the MFI's borrowing plans over the last financial year.

Apart from NCD, the MFI will raise funds from banks and securitization deals.

“We might raise between Rs 50-100 crore through NCD by the end of this financial year,” said Chandra Shekhar Ghosh, the founder and chairman, Bandhan.

 

At present, Bandhan a loan outstanding portfolio of about Rs 3467 crore.

Some of the other MFIs which have raised funds through NCD this financial year include, Bangalore-headquartered micro-lending institution Grameen Financial Services , which raised Rs 25 crore through the instrument.

While NCD and CP had been a popular fund instrument for MFIs prior to the crisis in Andhra Pradesh, after the new regulations, not many of them had been looking at NCDs to raise funds. Also, most of the NCDs are being raised by MFIs, with substantial operations outside Andhra Pradesh. However, the cost of raising funds through NCDs is mostly higher than regular bank funding, with most transactions being bilateral in nature, with no public participation.