Arohan,an Intellecap group company is the second largest Kolkata based NBFC MFI in the country with close to INR 400 Cr assets under management across 104 branches spread over 38 districts of four states of West Bengal, Bihar, Jharkhand and Assam.
Arohan has raised INR 60 crores from a fund managed by Tano Capital, an alternate asset management firm founded in 2004 by Chuck Johnson, formerly Co-President of Franklin Templeton Investments and CEO of Templeton Worldwide Inc. this equity infusion bears testament to the growing investor and stake holder confidence in the growing microfinance sector and specifically Arohan, its people and operations. Piyush Goenka, Investment Director, Tano Capital said “Arohan is our first microfinance investment in India till date and given our demographics,believe that Financial Inclusion will be a big play in years to come.The Intellecap group has done pioneering work since 2007 in the sector and we are delighted to be working with them”
Vineet Rai,Chairman Intellecap said “ The present government has clearly signaled utmost seriousness in achieving financial inclusion in India with initiatives like PMJDY,MUDRA and we as a group would be honoured to play our part.Our 3 NBFC’s – Arohan,IntelleCash & IntelleGrow today cover individual,tiny,micro,small & medium enterprises with loan sizes ranging from INR 10k to INR 10Cr with a focus on low income states in central,east and NE parts of the country.We have applied to the RBI and see becoming a Small Finance Bank (SFB) as a logical next step in this journey”
Small and medium sized MFIs may now see more equity capital infusion from mainstream investors. Arohan’s unique value proposition of organic & inorganic growth with its focus on the underserved markets in the Low Income States of the East, North East and Central India, its operational,management strength & corporate governance standards have helped attract mainstream capital. Its parent company Intellecap adds to its strength with an enabling ecosystem of sister companies which operate in diverse social enterprise related ventures from advisory to networks and capital.
Intellecap group has recently also applied for the SFB (Small Finance Bank) licence and is very well aligned with the RBI focus on the financially underserved Central, Eastern, and North Eastern parts of the country, where socio-economic indicators and financial inclusion are the lowest, and which need more robust measures as far as removal of barriers to banking are concerned. Says Arohan’s MD, Manoj Kumar Nambiar: “We are delighted to get Tano on board as an investor in Arohan.The enhanced net worth will help us implement our growth plans in the 10 low income states starting with Odisha in Apr’15.We offer a wide product suite on the credit side,provide insurance & micropension products to our clients and will soon start liability products as a BC of partner banks”
The Tano equity raise set the tone for more mainstream investors to look at microfinance, and ultimately development focused enterprises, as sustainable, long term ventures which have the potential to create win-win-win situations for society, the company and its investors. The MFI sector in India (over INR 35,000 crores of outstanding portfolio across 35 million clients) serves the underserved and the most financially excluded sections of the society. The common customer for the MFIs are often illiterate, poor, from a backward strata, yet are those who are looking to make a change in their lives by embarking on a journey of entrepreneurship. Hence in this business model which delivers over 99.9% collection rates,funds become crucial for the financial institutions – just like the customers they serve, they require a support system of reliable lenders to support their operations and ensure sustainability. A typical equity infusion gives a MFI an ability to raise over 4 times in debt capital from the market, and continue on its journey forward with its customers.
About Arohan
Arohan is one of the most respected microfinance institutions in Eastern India with a mission to provide financial inclusion to poor households. A Non-Banking Finance Company (NBFC) MFI with headquarters in Kolkata, Arohan operates in the low income states of West Bengal, Bihar, Jharkhand and Assam through over 100 branches. The Company played a pioneering role in introducing individual lending to micro-entrepreneurs in urban areas and currently offers innovative micropension and insurance products to its customers. Arohan’s loan portfolio currently is close to INR 400 Cr, catering to the financial needs of over 325,000 customers.
Through an acquisition in September 2012, Arohan joined the Intellecap Group. This acquisition involved incremental investment of more than USD 5 million and represented the first significant consolidation in India’s microfinance sector. In September 2013, Aavishkaar Goodwell-II and Michael and Susan Dell Foundation invested a further amount of USD 3.4 million in the organization. The company has further received investments from alternate investment fund Tano Capital of USD 10 million in March 2015