Muthoot Microfin has raised $75 million through external commercial borrowings and the proceeds will be utilised for on-lending and financing of eligible social loans, the microfinance company said on March 28.
The social loan has a maturity of three years and three months and benchmarked to a three-month SOFR (secured overnight financing rate) with a margin of 2.85 percent, which will be serviced at a quarterly frequency, the company said in a release.
The facility is fully hedged for principal and interest without any forex risk to the company. Banks are expected to join later through the greenshoe portion, it added.
“The ECB (external commercial borrowings) will further our business objectives as we plan to utilise the fund towards facilitating microfinance loans across geographies ,” Muthoot Microfin CEO Sadaf Sayeed said in the release.
The strategic move not only opens avenues for international partnerships but also introduces the MFI sector to diverse international banking entities across different geographies, he said.
Standard Chartered Bank was the sole arranger of the funds and acted as the social loan coordinator for the transaction.
Standard Chartered Bank, Doha Bank, RakBank (National Bank of Ras Al Khaimah), Union Bank of India (UK) Ltd, and Canara Bank, GIFT City also participated in the deal, the release said.
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