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Grameen Koota Reaches Milestone with 1 Million Microfinance Customers

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Monday, July 27, 2015 3:00PM IST (9:30AM GMT)
Bangalore, Karnataka, India

Bangalore-based NBFC –MFI, Grameen Koota Financial Services Pvt Ltd (Grameen Koota) has reached a new milestone of 1 million microfinance customers, in a testimony to its strong client-centric approach aimed at providing holistic financial and social services.


Grameen Koota, with 3,000 employees working in 270 branches spread across Karnataka, Maharashtra, Tamil Nadu, Madhya Pradesh and Chhattisgarh, reached one million customers with a portfolio of Rs.1, 602 as of 30th June 2015. As part of its future mission, Grameen Koota has been striving to reach over 2 million poor and low income households through financial products and development services by 2020.

Founded as an NGO project in 1999 by Vinatha M. Reddy to cater the need of micro-credit to the rural low-income households, the MFI was modeled after taking inspiration from the success story of Nobel Laureate Prof.Muhammad Yunus and his Grameen Bank. Suresh K Krishna as Co-Promoter and Director supported her in this initiative, which has grown largely after its transition into a non-banking financial corporation (NBFC) in 2007-08.

On reaching one-million customer base, Vinatha M Reddy, who is also Chairperson of Grameen Koota, said, “As a responsible MFI, Grameen Koota will continue its meaningful work with renewed commitment and reach out to thousands of other unbanked households in the coming years.”

Suresh K Krishna, Co-Promoter & Director of Grameen Koota, echoed similar views when he said, “The success of Grameen Koota is also a demonstration of the need and relevance of microfinance services to the poor and low income households. Grameen Koota will continue to be client centric organization and provide need based microfinance services in a transparent manner. I also thank and recognize the efforts of over 3,000 employees who have been working tirelessly, with the passion to see change in the community.”

Udaya Kumar, Managing Director and CEO of Grameen Koota, said: “We serve with our responsible lending principles along with social focus by providing financial literacy, micro-credit for all their needs, awareness on social, economic, education, health hygiene, water, sanitation etc. Customer Retention of over 90% validates our pro-poor business and social focus.”

Grameen Koota is backed by CreditAccess Asia & Creation Investments Capital Management, MFI focus investors, who have been aligned with vision and mission of the promoters.  Major Private and public sector Banks including Axis, ICICI, IDBI, SIDBI, State Bank of India, among others are the lending partners. Further, Grameen Koota has been supported by international lenders such as Standard Chartered Bank, Blue Orchard, responsAbility, Triodos Investments and others.

Congratulating Grameen Koota on reaching its milestone of one-million customers, Paolo Brichetti, Founder & CEO, CreditAccess Asia, said, “Grameen Koota is a key part of our integrated Group of credit institutions and we are very proud of this excellent result. We have supported the company since 2009 and it has been exciting to support the Management Team of Grameen Koota in this path to impressive growth. Continuing to keep focus on clients’ interests, will ensure that Grameen Koota will reach new milestones.”

Ken Vander Weele, Co-Founder and Partner of Creation Investments, said, “We are very pleased to be a shareholder in Grameen Koota. The Company has been uniquely able to manage rapid growth without ever compromising on the quality of service to its clients or the principles of client protection and care.”

About Grameen Koota Financial Services Pvt Ltd

Grameen Koota is one of the 5 financial institutions in the world and one of the 3 microfinance institutions (MFI) in India to have been honored by Smart Campaign for having met all the client protection principles. It is also one of the few MFIs be awarded with Truelift Certification of ‘Achiever’s level’ by M-CRIL and Social Rating of  Σα-(alpha- minus) for its commitment on social performance and pro-poor business.

Grameen Koota has been working with Joint Liability Groups formed exclusively of women belonging to poor and low income households by providing them with its diverse credit products catering all life-cycle needs such as income generation and access to water, sanitation, education, health care, home repairs, emergency, energy efficient cook stove etc. It gives its clients the option to repay weekly, fortnightly or monthly, depending on their cash flow and convenience.

More information: www.gfspl.in

Photo Caption: Grameen Koota reaches milestone with 1 million microfinance customers, a testimony of its strong client-centric approach. Photo Credit: Vikash Kumar

For News Release background on Grameen Koota click here
Media Contact Details
Udaya Kumar, MD & CEO, Grameen Koota Financial Services Pvt Ltd, +91-9901100889, udayakumar@gfspl.in

http://www.financialexpress.com/article/companies/grameen-koota-reaches-milestone-with-1-million-microfinance-customers/108616/

Commercial Credit and Finance PLC receives Rs. 1.68 billion from Creation Investments: the Largest International PE Investment into a Sri Lankan LFC

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Leading frontier markets private equity investor, Creation Investments Capital Management LLC (“Creation”), through its wholly owned subsidiary, Creation Investments Sri Lanka LLC (“Creation Sri Lanka”), has agreed to invest Rs. 1.68 billion (US$12.4 million equivalent) into one of Sri Lanka’s leading finance companies, Commercial Credit and Finance PLC (“CCF”). The transaction will involve the issuance of 80 million new shares for a consideration of Rs. 1.68 billion or approximately 25.15% of CCF. The transaction has received the necessary CBSL, SEC and CSE approvals and will be completed subject to shareholder approval.

 

This is the largest investment by an international private equity fund into a publicly listed Sri Lankan licensed finance company and is a strong validation for the success of CCF. Creation is impressed by the strength of CCF’s leadership and commitment to the mission toward serving the under-banked population in Sri Lanka. The offered price at a significant premium to the trading value and NAV indicates strong future growth potential for the company. The new funds will be used by CCF for its future investment activities including further enhancing its branch network and expanding its asset and client base, and to meet the future capital adequacy requirements of the Company.

 

Creation has invested in many banks and finance companies across emerging markets and its investment into CCF will help provide guidance and support to CCF and promote best practises from its other international portfolio investments. The new equity investment will also strengthen the capitalisation of CCF and enable it to access international debt capital at attractive rates.

 

York Street Partners (Pvt) Ltd. acted as Sole Financial Advisor to the transaction. Varners was the Legal Advisor to CCF and FJ&G De Saram was the Legal Advisor to Creation.

 

Roshan Egodage, CEO of CCF, commented on the transaction, “we are committed to providing a wide range of financial products to the Sri Lankan consumer including a variety of microfinance and SME products combined with a high quality service which is part of our core values. Our partnership with Creation will enable us to continue this journey and grow the company towards becoming Sri Lanka’s leading licensed finance company”.

 

Patrick Fisher, CEO of Creation, added that “this is our first investment in Sri Lanka and the largest investment that we have made to date across our Creation Investments Social Venture Funds. We look for quality investment opportunities across many emerging and frontier markets globally. CCF exemplifies what we look for in prospective investments – market leadership, exceptional management, and alignment in the mission, vision and values. CCF is a leader in the Sri Lankan LFC sector given its tremendous growth in the past few years. We are excited to partner with the CCF team in supporting their future growth plans”.

 

“This was a complex transaction that required careful negotiation through several structured options as well as regulatory approvals”, Sujendra Mather, MD at York Street Partners said reflecting on the transaction. He further added, “we are delighted to see the successful outcome of this transaction which is truly a win-win for both CCF and Creation and comes at an opportune moment when several key changes are taking place in the financial services landscape in Sri Lanka”.

 

About Creation Investments Capital Management LLC

Creation Investments Capital Management LLC is a Chicago-based private equity firm founded in 2007 with over US$130 million under management. Its investor base includes Fortune 100 Banks, Insurance Companies, Hedge Funds and High Net Worth Individuals. Creation has invested in a number of financial services companies in emerging markets such as India, Mexico and Russia.

 

About Commercial Credit and Finance

Commercial Credit and Finance PLC is one of Sri Lanka’s leading finance companies with an asset base of Rs. 24.5 billion as at December 31, 2013 and is listed on the CSE. CCF has a wide range of financial products including an innovative portfolio of SME and Micro SME products which are distributed to over 400,000 customers through 60 branches across the island. CCF has a rating of BB+ from RAM Ratings.

 

 

Impact Investing Helps Advisors Stay Ahead Of The Curve – FA

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MARCH 20, 2013 • TIM FREUNDLICH

Financial advisors take note: your impact investing offerings will soon define whether you are ahead of the curve or whether you will be trying to catch up in years to come. JP Morgan’s recent Perspectives on Progress report, released in partnership with the Global Impact Investing Network (GIIN), found that impact investing among the fund managers interviewed will grow 12.5 percent to reach $9 billion in 2013.

But it’s just the sector’s expected growth that’s important, it’s how the shifting mindset of clients is already changing the landscape for financial advisors.

Last year’s Gateways to Impact survey of financial advisors found that nearly half of them already have clients engaged in sustainable investing, while 72% of advisors expressed interest in recommending sustainable investments to their clients.

“We’ve seen firsthand the growing interest in investments that have both financial and social ROI,” says Kathy Leonard, a financial advisor with UBS Financial Services and head of the Boulder, Colo.-based Leonard Social Investment Group,. “Impact investing has emerged as the dominant global trend that will drive future financial market opportunities.”

While the term “impact investing” is relatively new, it’s based on more than 40 years of evolution in socially responsible investing. Impact investments are investments made into organizations and funds that generate measurable social and environmental impact as well as financial returns.

Going beyond the definition, impact investing is about investor intention to create real and measurable positive outcomes for the world. As individuals seek “blended value” investment options that combine economic and social value creation, and as fund managers develop track records that support the claim of a range of positive outcomes including––but not limited to––market rate returns, impact investing is poised to attract significant capital going forward.

To successfully direct a portfolio of investments to achieve its full potential, investors must do two things:

• First, they and their wealth managers must reconceive the overall investment strategy to allow for consideration of more than just financial performance.

• Second, investors need a more comprehensive understanding of, and access to, the array of investment instruments available to them to construct their portfolios.

For financial advisors who are ready to incorporate impact investing, here are some tactical ways to get started:

Become more knowledgeable about the field. Several resources are readily available, including:

• The Global Impact Investing Network (GIIN) is a nonprofit organization dedicated to increasing the scale and effectiveness of impact investing. Their website includes an online impact investing resource center that features research, news clippings, events, useful links, and GIIN publications about impact investing.

• The ImpactAssets 50 is a screened roster of private debt and equity fund managers offering impact investment strategies across a variety of asset classes, issue areas, and geographic areas. The IA 50 is available online at www.impactassets.org and focuses on filtering for track record and commitment to impact investing at the firm level and is a starting place for investors and their advisors who are looking for credible firms across thematic areas of impact investing.

• Impact Investing: Transforming How We Make Money While Making a Difference, co-authored by Jed Emerson and Antony Bugg-Levine, is the first book on the topic of impact investing and charts the growth of the field while explaining the “blended value” proposition for investors, funders, and entrepreneurs.

Know what is available to your clients:

• Find out if your firm offers sustainable investment products. These may be ESG (environmental, social, governance) or socially responsible mutual funds, community development bond funds, or Calvert Foundation’s Community Investment Note.

• Identify a community development bank in your area. Using these institutions for basic checking and savings can be an easy first step to put a client’s money to work for positive local impact.

• For clients with philanthropic capacity, there are donor-advised funds such as ImpactAssets’ Giving Fund that specialize in impact investing and offer a range of private debt and equity impact investment options. These funds interface directly with financial advisors, allowing them to maintain management of assets.

• Talk to peers who have been helping clients incorporate impact investing into their portfolios and learn from their experiences.

Talk with your clients:

• By asking your clients about their interests and overall portfolio objectives you can determine if impact investing is a good fit and if so, what kinds of products will align with their interests.

• Discuss your client’s comfort with liquidity or lack thereof, intended impact area and/or geographic focus, and their expected risk and return to help narrow the field of appropriate impact investments.

Rather than investing capital for simple financial returns, an investor engaged in pursuit of multiple returns will need to be directly involved in working with his or her asset managers to ensure that their portfolio reflects the desired impact strategies. And asset managers and advisors will increasingly provide leadership to their clients in constructing solutions that meet this appetite.

Impact investment approaches are gaining momentum and will be the baseline for the next generation of investors. This year that will see impact investing expand beyond high-net-worth investors and have a greater presence among mainstream retail investors.

Financial advisors who are receptive and informed when clients seek a broader definition of ROI will be positioned to take advantage of this growing market opportunity and will go a long way in ‘future proofing’ their client relationships.

 

Tim Freundlich is president of ImpactAssets, a nonprofit financial services firm that increases the flow of capital into investments that deliver financial, social and environmental returns. Its impact investment strategies, donor-advised fund and knowledge resources provide a dynamic platform for wealth managers and the clients they serve to advance social or environmental change through investment. ImpactAssets seeks to shed light on—and drive capital to—the field’s most promising organizations and initiatives, helping to build the field of impact investing.

 

http://www.fa-mag.com/news/impact-investing-helps-advisors-stay-ahead-of-the-curve-13694.html

Social Impact Investing Will Be the New Venture Capital

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Social Impact Investing Will Be the New Venture Capital
by Sir Ronald Cohen and William A. Sahlman  |   8:00 AM January 17, 2013

During the past century, governments and charitable organizations have mounted massive efforts to address social problems such as poverty, lack of education, and disease. Governments around the world are straining to fund their commitments to solve these problems and are limited by old ways of doing things. Social entrepreneurs are stultified by traditional forms of financing. Donations and grants don’t allow them to innovate and grow. They have virtually no access to capital markets and little flexibility to experiment at various stages of growth. The biggest obstacle to scale for the social sector is this lack of effective funding models.

But the problem is not money, per se. Take a look at the social sector in the U.S. There are $700 billion of foundation assets, and 10 million people working for non-profits. These are huge numbers. Yet there are massive inefficiencies in capital allocation. Too often donors starve organizations and entrepreneurs by refusing to cover overhead. This makes it impossible for social organizations to scale. Interviews conducted in 2000 by the Social Investment Task Force in the United Kingdom, revealed what most nonprofit leaders already know: Almost all social sector organizations are small and perennially underfunded, with barely three months’ worth of working capital at their disposal. And that hasn’t changed in the last 12 years.

Compare that to the world of venture capital. If a business entrepreneur came to us with a plan for growing a new business without spending a penny on overhead, we would show him or her the door. Why should it be any different for a social entrepreneur?

We believe we are on the threshold of a major change not unlike the early days of the modern venture capital industry. In the mid-1960s and early 1970s, a new type of investment vehicle was created: the professionally managed venture capital partnership. This organizational innovation drew investment capital from institutional players like pension funds and endowments and allowed for appropriate time horizons. Soon venture capital became a core part of many economies and those bold moves changed everything. Entrepreneurship has never been the same.

Just as the formation of the venture capital industry ushered a new approach and mindset toward funding innovation within the private sector, impact investment has started to bring opportunities to harness entrepreneurship and capital markets to drive social improvement. This in time will bring much needed change to the social sector.

We’re already beginning to see innovation. People are developing new securities that link social performance to financial returns. There are new experiments — models that use the tools of finance to try things in different ways — sometimes creating income streams from novel concepts, likefunding cancer research. There are also hybrid organizations like the Acumen FundBridges Ventures and Root Capital that channel patient capital to high social return investments around the world. There are even organizations like Endeavor and Social Finance that help entrepreneurs gain access to global capital markets to fuel growth in employment and social impact.

Within the last two years, government agencies in the U.K., U.S., Australia, Canada and Israel at the national, state, or even county levels have begun exploring the potential of social impact bonds. These are financial instruments that pay an investor if the cost or incidence of something (foster care or prisoner recidivism) is reduced, with comparable or better results, than a government program. If so, the investor makes money; if not, they lose money.

As more and more examples emerge from all regions of the world — addressing issues as diverse as recidivism, drug discovery, sleeping sickness, literacy, food deprivation, and poverty — one begins to get the sense that there’s no stopping this idea whose time has come.

Things will change rapidly over the next five to ten years. If investors can find the same courage the early institutional backers of the venture capital industry found, we will see talented social entrepreneurs build large, effective organizations that move the needle on a social issue and deliver acceptable financial returns at the same time.

To get there we need success stories — like the early investments venture capitalists made in companies like DEC, Intel, Scientific Data Systems, Teledyne, Genentech, Apple and Tandem — that build confidence and unlock private capital. When investors believe they can earn acceptable returns, money will flow. And smart people will feel they can succeed because they can attract capital.

We live in a world awash with capital — some $200 trillion in financial assets according to McKinsey & Company. We also live in a world of remarkably low interest rates. If we can create instruments — like social impact bonds — that can deliver a financial return of about 7%, a high social return and limited downside risk, then we can meet two needs. We can provide reasonable returns that are uncorrelated with equity markets and attract capital to entrepreneurs who can develop innovative and effective ways of improving the fabric of our society.

Follow the Scaling Social Impact insight center on Twitter @ScalingSocial and register to stay informed and give us feedback.

Microfinance Today – a Social Investment

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Laura Hemrika, Corporate Citizenship

31.01.2012
As microfinance continues to grow and the broader field of social entrepreneurship gains increased attention at Credit Suisse and beyond, Rupert Scofield, CEO of microfinance partner FINCA International and experienced social entrepreneur, talks to us about future trends and opportunities in both.

 

One of the earlier and best known examples of social entrepreneurship, microfinance today ensures that millions of people have access to financial services and products. With billions still to reach, this perceived “mature” social investment continues to grow and to adapt its models, its approach and funding to maintain that careful balance of social goals and financial sustainability, in ever-changing environments. Rupert Scofield, cofounder and CEO of microfinance organization FINCA International and an experienced social entrepreneur, gives us insight into how, despite its longer history, a social enterprise like FINCA, and the industry as a whole, continues to meet that challenge. He shares with us the future trends and opportunities in microfinance and social entrepreneurship, and the important roles all stakeholders can play in their successful development.

Laura Hemrika: Microfinance has become a well-known concept, no longer just the realm of development experts. Does this mean your work is done? What lies ahead for microfinance?

Rupert Scofield: While microfinance reaches millions of people, our work is by no means done. We must continue to innovate and broaden client offerings through savings, money transfer and insurance products. We also have work to do to improve transparency and client protection. Partnerships like FINCA’s with Credit Suisse – which is helping us improve market intelligence to better inform decisions about product design – as well as industry-wide initiatives like the Smart Campaign, which is focused on integrating client protection and client-centered services into the core of microfinance operations, are key next steps.

What are some of the challenges in the microfinance industry today and looking forward?

In my opinion, there are a core set of challenges facing the industry – scaling microfinance to reach the three billion people living in poverty; transitioning into and operating regulated deposit-taking financial institutions; remaining sustainable in the face of increasing regulation and government involvement; and the unethical behavior of some Microfinance Institutes (MFIs). With the help of Credit Suisse, we’re addressing the first three of these issues through the FINCA Development Academy, an in-house training institution that will professionalize our workforce in the coming years ensuring that we have the human capacity to surmount the challenges we face.

How do you make sure you are having the desired impact with your work?

I believe that measurement is the key. FINCA was the first international microfinance network to develop a rigorous client assessment tool to evaluate improvements in our clients’ standard of living, and provide information about the need for new products and satisfaction with existing ones. Our Social Performance Audit Committee mandates the measurement of social performance on a regular basis, ensuring that we monitor social performance with the same zeal and precision that we monitor financial performance.

What is the role of commercial capital in microfinance?

Commercial capital must play a significant role in the sector because donor funding alone is insufficient to meet client demand for products and services. To best serve our clients, FINCA – like other microfinance institutions – started by accessing debt from capital markets, developing more and better products over time including the local currency note that Credit Suisse put together for us in 2011. When the mix of grants and debt no longer proved sufficient, we sourced equity capital from socially responsible investors.

We are hearing more and more about “social business” or social entrepreneurship and you’ve just published a book on it. What is it and why is it important?

For me, social entrepreneurship applies effective business practices, emphasizing sustainability and scalability, to address social issues and achieve social change. Social enterprises target market failures that, if not addressed, lead to severe long-term consequences. Social entrepreneurship can create positive social and/or environmental impact through a “double or triple bottom line” approach.

My book, The Social Entrepreneur’s Handbook, constitutes a “call to action” on the part of existing and would-be social entrepreneurs, and tells the inspiring story of FINCA’s transformation from an idea to a global financial services network.

What is the link between microfinance and social entrepreneurship?

Microfinance was the response to a major market failure: the inability of low-income entrepreneurs in developing countries to obtain loans to finance their businesses. Microfinance is a classic example of traditional business practices addressing social issues in a way that is both scalable and sustainable. At FINCA, we now have $500 million in loans-outstanding to over 900,000 low-income micro-entrepreneurs on five continents, and we’ve created over 8,000 jobs.

What are the trends to keep an eye on in social entrepreneurship?

Awareness of, and support for, social entrepreneurship has increased dramatically. More and more universities have academic programs for aspiring social entrepreneurs. In the corporate world, employees and shareholders are demanding accountability for more than financial profits. Social enterprises are cropping up in response to market failures across a wide array of industries and sectors including education, health and the environment.

What sort of challenges is the social business industry facing today and how can we respond? Is there anything that Credit Suisse or Credit Suisse clients could do to help?

From my perspective, social entrepreneurs face several significant challenges. First, a lack of start-up capital; funding is critical for any social enterprise, making the availability of willing investors a necessity. Second, many social entrepreneurs lack business management training which can undermine an otherwise promising idea. Third, the lack of social capital; social enterprises tend to be far more successful when they are part of a larger network. Credit Suisse can continue to play an important role in the investment process and with technical and management training for social entrepreneurs.

How do you see the future of the social business industry?

I am thrilled with how the momentum for transformative social enterprises has increased over the last decade, as organizations create tools and technology to solve social and environmental problems. The issue for the future is that of scale – as the industry grows, social enterprises must create scalable models in order to sustain this momentum. Social enterprise networks will be key for facilitating growth, best practice exchange and resource-sharing.

What roles can banks play in social entrepreneurship?

I think banks can play a key role by providing the tools necessary for success: start-up capital, mobilizing investors, training, technology, and physical capital sharing. By enabling access to capital and sharing knowledge and technology, banks will be making an important investment in the betterment of society, with potential for both social and financial returns.

Credit Suisse and Microfinance
In 2012, Credit Suisse celebrates ten years of engagement in microfinance and continues its mission to provide leadership and develop innovative solutions to link the top with the base of the income pyramid and promote financial inclusion. Today Credit Suisse enjoys an industry-leading franchise in microfinance across the bank.Within the Microfinance Capacity Building Initiative (MCBI), the bank works directly with microfinance networks and MFIs in the field to strengthen management training and development and to drive product and process innovation – enabling the organizations to meet their social and financial goals in an efficient and responsible manner. FINCA has been a partner of the MCBI since 2008 to develop its staff and training academy.

In addition to microfinance, in 2011 Credit Suisse started a number of initiatives focusing on social entrepreneurship in close partnership with the Schwab Foundation for Social Entrepreneurship.