SIDBI-backed Bandhan Financial Services Private Limited, India's largest microfinance provider in terms of loan disbursements, is planning to raise around Rs 160 crore (around $26 million) from International Finance Corporation (IFC).
IFC will make a subordinated debt investment by subscribing to non-convertible debentures to be issued by the company.
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IFC's debt investment will help Bandhan diversify its sources of funding thereby providing comfort to potential lenders and investors. Since the debt would be subordinated, it would also enable Bandhan to meet its regulatory capital requirements.
Registered as an NBFC-MFI and headquartered in Kolkata, Bandhan Financial Services' current borrower base is around five million women borrowers. It has a loan portfolio of around Rs 5,400 crore (around $870 million).
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Bandhan operates mainly in rural areas across states including some of the eastern and north eastern states. It provides formal credit services to low income households.
Bandhan is promoted by Chandra Shekhar Ghosh and other key shareholders include Financial Inclusion Trust, North Eastern Financial Inclusion Trust, Bandhan Employees Welfare Trust, International Finance Corporation and Small Industries Development Bank of India (SIDBI).
