Satya MicroCapital raises Rs 40 crore through NCDs

Micro-finance company Satya MicroCapital , which offers collateral-free credit, will use the funds to extend loans to micro, small and medium enterprises.

Micro-finance startup Satya MicroCapital has issued Non-Convertible Debentures (NCDs) to a private debt fund and a Microfinance Enhancement Facility S.A. (MEF), and raised Rs 40 crore in debt funding. Satya MicroCapital will use the funds to lend to Indian micro, small, and medium enterprises run by women.

Vivek Tiwari, MD and CEO, Satya MicroCapital Limited, said: “Having achieved tremendous growth since the previous financial year and having built a presence across 11 states in the country, we are at a critical juncture in our growth trajectory. The funds raised will help us scale up our operational base, capital base, and reach more entrepreneurs by developing innovative credit offerings for micro, small, and medium enterprises across the country.”

Satya MicroCapital Limited is an NBFC-MFI that offers collateral-free credit to micro enterprises on the basis of a strong credit assessment platform and a centralised approval system. The company has adopted a unique Limited Liability Group (LLG) model for extending loans and ensuring repayment. The company’s LLG model distributes the liability among each group member, which exists only up to 10 instalments in bi-weekly collections.

Social touch to lending

Through this model, the company aims to add a social touch to lending by integrating modern technology into the micro-finance industry. Satya MicroCapital Limited primarily caters to women who own businesses or are looking for business expansion. The group lending model allows groups of borrowers to share the liability and responsibility to repay loans, while helping them build a strong credit profile to avail finance from traditional financial institutions.

Incepted in October 2016, the company has since registered impressive growth by achieving an Assets under Management (AUM) value of over Rs 300 crore in less than 2 years. Its current strategy is to use its platform to potential to increase efficiency in lending, reduce risks, and enhance overall customer experience.

Satya MicroCapital Limited launched its microfinance operations from its Bulandshahar Branch, erstwhile known as Sikandrabad Branch in Uttar Pradesh. The firm has since established 65 branches across 11 states, namely, Assam, Bihar, Chhattisgarh, Haryana, Orissa, Punjab, Rajasthan, Uttar Pradesh, Uttarakhand and West Bengal. According to the Intellecap study, the market size for microfinance in India translates to an annual credit demand of $5.7 to $19.1 billion, assuming loan sizes range between $100 and $250.