Indian microfinance firm gets $75m

A consortium of investors is backing the growth of SKS Microfinance with ‘the largest private equity investment in microfinance globally’.

SKS Microfinance, a non-banking finance company that caters to the poor, has raised $75 million from a group of investors led by Sandstone Capital, with Kismet Capital and SVB India Capital Partners as returning investors.

This is the company's fourth funding round, which it says is the world's largest private equity investment made to date in a microfinance institution.

Established in 1998, SKS provides micro-insurance products and micro-loans to poor households across 50,000 villages and urban slum areas in India. It has provided $979 million in such loans to 3.3 million households so far, and its latest funding is expected to expand its services to 8 million households in the next two years.
 
The investment will provide some of India’s poorest communities a chance to better their lives while simultaneously providing investors with returns, according to Paresh Patel, founder and managing partner of Sandstone, a US-based hedge fund focused on India.

SKS' backers include US venture firm Sequoia Capital; the Small Industries Development Bank of India; Unitus, a US-headquartered non-profit organisation; and Columbia Ventures, a US-based private investment firm.

SVB India Capital Partners is an affiliate of Silicon Valley Bank. It made the investment from SVB India Capital Partners I, a $54 million venture fund focused on co-investments across diverse sectors in India.

Established in 2004, Kismet Capital is focused on private equity, mezzanine, distressed and special situation opportunities in Southeast Asia and India. It is headquartered in New York and also has operations in Mumbai and Bangkok.