Jagaran Microfin raises Rs 22 cr from BlueOrchard Finance through NCD issuance, Technology News, ETtech

Illustration: Rahul Awasthi
Illustration: Rahul Awasthi

Kolkata-based lender Jagaran Microfin has raised Rs 22 crore through in debt financing from Swiss impact investment major BlueOrchard Finance.

The funding was raised through the issuance of non-convertible debentures that were subscribed to by BlueOrchard from its Microfinance Initiative for Asia (MIFA) Debt fund.

This is also the second round of debt funding undertaken by BlueOrchard in Jagaran, having earlier backed the decade-old microfinance firm in December 2018, when it was reported to have put in $7.8 million.

Unitus Capital acted as the sole financial advisor to Jagaran Microfin for this transaction.

“We will use the additional funds received for furtherance of our operations so that we are able to reach more rural households by providing them with income generating loans,” Jaydeep Ghosh, chief executive of Jagaran Microfin, said in a statement.

Founded in 2010, Jagaran provides micro credit through the Joint Liability Group mechanism to the rural population in Eastern and North-eastern part of the country. Till date, the microfinance institution claims to have provided loans to 2.3 lakh borrowers, and has an outstanding gross loan portfolio of about Rs 440 crore.

“India is a very important emerging market for us. This is our second round of debt funding to Jagaran. This additional funding demonstrates our comfort in Jagaran’s business model. We support Jagaran’s mission in creating a positive impact within microfinance ecosystem and improving the lives of people on low incomes,” Nikunj Oli, regional manager – Asia, at Blue Orchard Finance, said in he official statement.

BlueOrchard was founded in 2001, by initiative of the United Nations, as the first commercial manager of microfinance debt investments worldwide. The Swiss impact investor has, till date, invested over $6 billion across more than 80 countries.

The social capital investor has backed a number of Indian Microfinance and non-banking financial companies, such as Satya MicroCapital, Aye Finance and Margdarshak Financial Services.

“We believe Jagaran is one of the MFIs which has good governance, strong management and robust control to scale and create significant impact in this space. Our beliefs are reconfirmed by the additional funding received by Jagaran from BlueOrchard to further increase its operations,” Amit Kumar Rathi, managing director of Unitus Capital, said.

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