Micro Finance Institution Uttrayan Financial Services aiming a robust growth in lending this year of over 30 per cent growth in assets, has tapped Sidbi to raise resources apart from traditional banking finance.
Moreover, it has also begun borrowing resources from MFI turned bank, Bandhan.
"Sidbi will soon subscribe to Optionally Convertible Preference Shares of Uttrayan worth Rs two crore at an interest rate of nine per cent," Uttrayan managing director Kartick Biswas said.
This is the first time Uttrayan has borrowed apart from banks and NBFCs.
After six years of the tenure of the paper, both will have options to convert the same in equity at a valuation decided by an independent valuer, he said.
Moreover, the MFI has begun borrowing from Bandhan Bank which offers more tailored product suited for MFIs, Biswas said.
"We have begun borrowing from Bandhan Bank, it offers loan which is more tuned to MFIs," he said.
Speaking about growth in business, he said the MFI was aiming for some 33 per cent in business in the current fiscal to asset under management to Rs 175 crore from Rs 120 crore now.
"The MFI is expanding its base more in East and NE states to tap growth potential. In FY18', we aim the AUM growing to Rs 250 crore," Biswas said.
The paid up capital is Rs 12 crore, which will soon increase to Rs 17 after Sidbi's infusion and Rs three crore infusion from promoters.
Uttrayan non-executive director Anindya Sen said they are trying to bring down cost of funds from the present 16 per cent.
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