ASA International India Microfinance has raised 10 million euros from a German-based microfinance fund via the External Commercial Borrowings (ECB) route.
Invest in Visions (IIV) is a social impact investing firm that manages an open-ended fund aimed at microfinance institutions in countries like Bolivia, Cambodia, Kosovo, Moldova and Tajikistan.
Vivriti Capital acted as the External Adviser of ASA International India Microfinance. IIV was advised by Agents for Impact. The transaction was supported by Vivriti Capital’s online platform-CredAvenue.
Garima Gupta, Head-Offshore investor coverage at Vivriti Capital said the microfinance sector in India is attracting foreign investments these days.
“Microfinance sector in India has shown steady performance and growth even in the last one year when other asset classes and other non-banking finance companies (NBFCs) were impacted by the liquidity crunch,” Gupta said, adding, Vivriti has an additional 15 ECB deals in the pipeline for closure till March 31, 2020.
A number of policy relaxations this year has also made the Indian sector a lucrative investment destination.
In January, the Reserve Bank of India (RBI) liberalised ECB norms to allow fundraising in rupee as well as foreign currencies for all NBFCs under the automatic route.
“Microfinance institutions could previously only raise rupee-denominated facilities, which eliminated all lenders which did not want to undertake currency risk when investing in the segment,” said Gupta.
Also, the standardisation of the minimum average maturity to three years opened long-term funding avenues for other NBFCs (HFC, AFCs amongst others).
ASA International India is the arm of Dhaka-headquartered ASA, which operates in over 12 countries. In India, it is based in Kolkata and operates across West Bengal, Assam, Bihar, Tripura, Uttar Pradesh, Meghalaya and Odisha.