The past year has been difficult for non-banking finance companies (NBFCs) to raise capital due to the liquidity crisis in the sector and with the Covid-19 pandemic disrupting businesses across sectors. Despite this, Delhi-based SATYA MicroCapital Ltd; an RBI registered NBFC-MFI that provides credit access to the country’s underbanked population and micro enterprises, has managed to raise approx. ₹135cr through Non-Convertible Debentures (NCDs) from impact investment fund manager responsAbility Investments and Swiss impact investor, BlueOrchard Finance Limited.
“The pandemic has negatively impacted the Small and Micro-Entrepreneurs across the entire nation. Without adequate financial support it’s a very challenging task for them to come out of pandemic induced roadblocks. Post surpassing second wave of Covid-19, the immediate requirement is to salvage the businesses and assist them in returning to normalcy. The unbanked population will look to the microfinance sector to help them resume their normal lives. The impeccable strength, courage, and coordination demonstrated in the past by both the Microfinance and MSME sectors serves as evidence that MFI strata will play an integral role in eradicating domestic distress through credit-based poverty reduction strategies and will relevantly develop the underserved. I ardently believe that with the help of this funding, SATYA will be able to meet the immediate liquidity demand of businesses which will not only bring their businesses back to life but will also prepare them for a brighter future. I would also like to extend sincere gratitude to responsAbility Investments & Blue Orchard for facilitating SATYA with this financial backing. This will enable SATYA to achieve its vision of providing financial assistance to 5 million households by the year 2025 with an exponential speed,” said Vivek Tiwari, MD, CIO & CEO, SATYA MicroCapital Ltd.
Approx. ₹55cr funds managed by Blue Orchard was disbursed in June & July 2021 and the remaining ₹80cr was made available recently by responsAbility Investments, SATYA MicroCapital said in a statement on Saturday. Adding that, the NBFC will utilise the debt funds to back liquidity needs of Small and Micro-Entrepreneurs along with an individual client base which will help their businesses to recover from operational crisis induced by the pandemic. This will not only act as a catalyst in socio-economic upliftment of the MSME sector but will also help in the much-needed economic revival of the country.
The NBFC-MFI offers collateral-free credit to micro-enterprises based on strong credit assessment and a centralized approval system. The company has adopted a unique Limited Liability Group (LLG) Model for extending loans and ensuring repayment. The group lending model allows groups of borrowers to share the liability and responsibility to repay loans, while helping them build a strong credit profile to avail finance from traditional financial institutions. Through the model, the company aims to add a social touch to lending by integrating modern technology into the Micro Finance industry. SATYA primarily caters to women who own businesses or are looking for business expansion.
“SATYA has raised long term foreign debts from Blue Orchard and responsAbility Investments amounting to approx. ₹135 Crores that will boost our plans of reaching a wider section of micro-entrepreneurs. This is a testament of the belief that our both esteemed debt investors have instilled in SATYA and its operational model,” said Sanjay Goel, Head – Finance, SATYA MicroCapital Ltd.
SATYA has since registered impressive growth by catering to more than 5 lakh borrowers within less than five years of its establishment in October 2016. Till date, the NBFC has enabled debt financing of ₹3,225 crore for its clients. It has a workforce of over 2,700 people across 177 districts with 245 operational branches in 21 states of the country.