33181 - Suryoday

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Summary of Investment Information

Project Number

33181

Company Name

SURYODAY SMALL FINANCE BANK LIMITED

Date SPI Disclosed

Apr 1, 2013

Country

India

Region

South Asia

Projected Board Date

May 2, 2013

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Jun 11, 2022

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : May 29, 2013
Signed : Jun 7, 2013
Invested : May 6, 2014

Sector

Microfinance and Small Business - Non Commercial Banking

Project Description

This proposed project involves a quasi-equity and senior debt investment in Suryoday Microfinance Private Limited (“Suryoday” or the “Company”) which is a micro finance institution operating as a non banking finance company primarily in Western India. The Company has a borrower base of approximately 145,000 borrowers and a gross loan portfolio in excess of INR1,200 million across 5 states. Suryoday’s customer segment includes salaried women (informal sector) working as housemaids, cooks or in small factories and self employed women working as vegetable / fruit vendors, small shop owners etc. Suryoday has been proactive in deployment of technology and is establishing itself as a customer centric institution with a commitment to responsible finance.

IFC’s proposed investment will help Suryoday expand its operations by strengthening its balance sheet, providing access to diversified funding sources and meeting its regulatory capital adequacy requirements for the next 2-3 years.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	6.0
Equity	2.78

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Loans to Microfinance Borrowers

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

1. Access to Microfinance: This project will help in expanding the outreach of access to microfinance to borrowers who have little or no access to formal sources of financing with Suryoday expected to provide financing to more than 1 million women borrowers in the next 3-5 years
2. Balanced growth of Microfinance: This project will promote a more balanced growth of microfinance in India. Suryoday''s operations are expanding in Western India where MFI penetration has historically been low

1. Institution Building: IFC''s assistance would potentially help the Company to further reduce cost of intermediation, achieve higher client outreach and develop best practices in the areas of risk management and product design. 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 Suryoday
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 Suryoday''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 Base of the Pyramid
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

The Company provides individual and group microloans (average ticket size below US$2,000) for various non farm and farm based income generating activities and small businesses. The lending profile presents E&S risks which have limited adverse environmental or social risks or impacts and therefore the project has been classified as category FI-3. The project will need to comply with the IFC MFI Exclusion List and National E&S laws.

Contacts

For Inquiries About the Project, Contact

Mr. Baskar Babu, CEO
Suryoday Microfinance Private Limited
1101 Sharda Terraces
Plot 65 Sector 11, CBD Belapur
Navi Mumbai – 400 614
http://www.suryodaymf.com

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