Leading micro-finance institutions (MFIs) are targeting banking licences.
SKS Microfinance, the country’s only listed MFI, had revealed its plan for banking. Today, Bandhan Financial Services Pvt Ltd, a MFI, announced that it would approach the Reserve Bank of India once the latter came out with the final guidelines for non-banking finance companies.
Bandhan has brought in International Finance Corporation (IFC), the investment arm of the World Bank, as an equity investor.
The investment comes at a time the micro-finance industry is still facing rough weather and the valuations of most of the companies have taken a beating.
IFC has invested $30 million (around Rs 135 crore) in Bandhan Financial Services Company by picking up nearly an 11 per cent stake even when banks in the country are not comfortable in extending loans to MFIs.
Bandhan is also in talks with other institutional investors such as KfW of Germany.
Bandhan Financial Services Company has a share capital of Rs 86.33 crore at the end of March 2011. It means IFC had paid a hefty premium for an 11 per cent stake. Its net worth, including the IFC fund, stands at around Rs 600 crore.
Bandhan’s loan portfolio has grown manifold in the last four years. The loan book is now valued Rs 2,500 crore.
