30283 - Ujjivan

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Summary of Investment Information

Project Number

30283

Company Name

UJJIVAN FINANCIAL SERVICES LIMITED

Date SPI Disclosed

May 4, 2012

Country

India

Region

South Asia

Projected Board Date

Jun 14, 2012

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

May 10, 2025

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jun 21, 2012
Signed : Jun 27, 2012
Invested : Sep 10, 2012

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

IFC proposes to invest in Ujjivan Financial Services Private Limited (“Ujjivan” or the “Company”), which is a leading Microfinance Institution (“MFI”) in India.
Ujjivan is amongst the few large MFIs that focus on providing micro loans to women borrowers in urban and semi-urban areas. Its target customers include self-employed women working as vegetable or fruit vendors, small shop owners, sari sellers, tailors etc; salaried women working in garment factories, hospitals, cooks, house maids, and piece rate workers involved in incense stick rolling, tailoring etc. Ujjivan today has about 1.1 million members and a loan portfolio of about US$140 million equivalent.

Ujjivan has over the years, established itself as one of the most customer centric institutions with a strong emphasis on responsible lending and good HR practices.

The proposed project intends to help Ujjivan fund its expansion and carry out strategic & operational changes in order to cope with the changed regulatory and business environment, and meet its regulatory capital adequacy requirements for the next 3-5 years.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	8.01

Development Impact

1. Increasing access to finance in low income states in India, including states in the northern and eastern parts of the country which have amongst the highest population densities and poverty rates in the country
2. Promoting a more balanced growth of microfinance by supporting an institution that been a front-runner in adopting technology, is a pioneer in focusing on consumer service and responsible financing and offers customized products for various financial and non financial needs of its members

1. Institution Building: IFC''s assistance would help Ujjivan to strengthen and expand its operations, diversification of product offerings, strengthening management capacity and corporate governance practices. IFC is a leading global provider of funding in microfinance and will play a key role by leveraging its relationships with other MFIs and MFI networks around the world to transfer knowledge of microfinance and introduce microfinance sector best practices to Ujjivan.
2. Demonstration Effect: IFC''s entry is expected to build confidence in the MFI sector post the AP crisis, and have a demonstration impact by catalyzing other investors, network partners and stakeholders to support Ujjivan''s expansion over the medium term. IFC''s investment would underline the faith in the sustainability of the microfinance business post the changed regulatory investment in addition to building investor confidence in the low income states towards provision of financial services to the BoP.
3. Diversification of Funding: IFC''s investment will help the Company diversify sources of funding by providing comfort to potential lenders and investors.

E&S Category Rationale / Risks and Mitigation

This transaction involves an equity investment and the overall portfolio risk is considered to be low. The project has therefore been categorized as FI-3 in accordance with IFC’s Environmental and Social Review Procedure.

Ujjivan primarily lends to groups of individuals (group lending, 96%) and the remaining 4 % is individual lending. The existing portfolio of the group lending include business loans for small shops, vegetable/fruit/flower stalls, sweet/confectionary shops, milk vending, tailoring, handicraft items, education loans, and family emergency loans. Individual loans include loans for cattle purchase, house construction/extension, individual business (including similar businesses like small shops, provision stores, trade business, milk vendors, tailoring etc) and purchase of water purifiers etc. The largest and average loan sizes have been under US$ 2,000 and US$ 240 respectively.

These lending activities entail minimal or no adverse environmental or social risks and/or impacts. For this project the client will be required to screen loans against the IFC Exclusion List and the Indian E&S laws and regulations.

Contacts

For Inquiries About the Project, Contact

Sudha Suresh
mailto:sudha.suresh@ujjivan.com

Ujjivan Financial Services Private Limited,
#93, Jakkasandra Extension, Sarjapur Main Cross Road,
1st Block, Koramangala,
Bangalore – 560 034

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This Summary of Investment Information (SII) is prepared by IFC to disclose a factual summary of the main elements of the potential investment. It also includes findings and recommendations related to environmental and social considerations regarding this potential investment. The purpose of the SII is to enhance the transparency of IFC’s activities. For any project documentation or data included or attached herein, whether prepared by the project sponsor or otherwise, authorization has been given for public release by the project sponsor. IFC considers that this SII is of adequate quality for release to the public, but has not necessarily independently verified all of the project information therein. It is distributed in advance of IFC Board of Directors’ consideration and may be periodically updated thereafter. Board dates are estimates only and this document should not be construed as presuming the outcome of the Board Directors’ decision. The following SII is disclosed in accordance with IFC's Access to Information Policy (AIP) that went into effect on January 1, 2012.

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