MFI Bandhan to raise Rs 600 cr in FY10

West Bengal-based Bandhan, one of the largest micro-finance institution (MFI) in the non-banking finance company (NBFC) space, is planning to raise Rs 600 crore in the fiscal 2009-10, by selling agriculture loan to banks and debt.

The MFI today announced that it had sold agriculture loan worth Rs 75 crore to IndusInd Bank.

Last fiscal, the MFI had raised Rs 300 crore through banks, said Chandra Shekhar Ghosh, executive director, Bandhan. At present, it has a loan-outstanding portfolio of Rs 703 crore.

"This transaction with IndusInd Bank was structured and arranged by Grameen Capital India and comprised a pool of advances to the agricultural and allied sectors made by Bandhan-Konnagar and Bandhan Financial Services," according to a press release by Grameen Capital, the company which has facilitated the deal.

 

Bandhan has signed a management and collection agreement with the bank, and will continue to administer the loans and channel the collections to the bank.

The deal had been factored in the balance sheet of the last financial year, said Ghosh.

Royston Braganza, chief executive officer (CEO), Grameen Capital India said, "The granularity of the portfolio, income generating nature of the loans and intensive contact with the borrowers are key factors which contribute to the robustness of the MFI sector."

Over the last 12 months, Grameen Capital had helped MFIs raise over Rs 300 crore through sale of agriculture loan portfolio. Roopa Satish, head-corporate and investment, IndusInd Bank, said, “The deal fits in well with the strategy of the bank to pursue activities and businesses, which have an element of sustainability.”

Post-successful closure of this transaction, Bandhan and Grameen Capital plan to work together on suitable structured finance solutions, given the ambitious growth plans to accelerate financial inclusion, according to the press release.