Margdarshak Financial Services

Aug 17, 2017

Exclusive: MFI Margdarshak raises $3m debt funding from impact investor BlueOrchard Photo: Margdarshak website Bhawna Gupta August 17, 2017 Lucknow-based micro-finance institution Margdarshak Financial Services Ltd (MFSL) has raised $3 million in debt funding from Switzerland-based impact investment manager  BlueOrchard . In the process, Margdarshak has issued non-convertible debentures (NCDs) with a maturity of five years to BlueOrchard, a top executive told DEALSTREETASIA. The NCDs are listed on BSE with a rating of BBB awarded by BRICKWORK Ratings. The proceeds raised through NCDs will help the company diversify its funding channels and instruments. In May, BlueOrchard backed NBFC Aye Finance with $8 million in the form of NCDs. Unitus Capital, a boutique Investment bank, acted as sole advisor to MFSL on this deal. “Post demonetisation, the companies operating in the poorest geographies have been facing challenges in raising money. The debt funding to MFSL is a strong signal that long term investors continue to have confidence in players that are doing impactful work,” said Abhijit Ray, co-founder and MD of Unitus Capital. MFSL currently operates across Uttar Pradesh, Bihar, Haryana, Uttarakhand, and Himachal Pradesh through 120 branches. It claims to have over two lakh active borrowers and has assets under management (AUM) of Rs 285 crore. MFSL is backed by investors including SIDBI & Dia Vikas. “We have done a considerable amount of work in the areas of poverty alleviation, financial inclusion and livelihood creation. We are extremely glad that an institution of the repute like BlueOrchard has decided to support us. This long-term funding will enable MFSL to serve additional poor households in the unchartered territories of the country,” said MFSL managing director Rahul J Mittra. Blue Orchard was founded in 2001 by a UN initiative as the first commercial manager of microfinance debt investments worldwide. It offers premium investment solutions to qualified investors and provides debt and equity financing to institutions in emerging and frontier markets. In 2015, Blue Orchard had also invested $8 million in Delhi-based microlender SV Creditline Ltd through NCDs. Financial services companies have been continuously raising funding across the region. In India, Arohan Financial Services raised Rs 155.5 crore ($24 million) to fund its expansion plans and IFC extended $20 million to Guwahati-based RGVN (North East) Microfinance Ltd in the form of a senior debt investment. Similarly, Myanmar Finance International Ltd raised an additional local currency-denominated $1 million debt facility from Malaysia’s Maybank, while Matrix Partners China led a Series A financing round in Shanghai-based credit assessment and online lending platform Alading Bank among other deals. Also Read: