[Funding alert] SATYA MicroCapital raises 153.25 Cr from Japan-based Gojo & Company

Microfinance institution SATYA MicroCapital Ltd on Wednesday announced that it had raised fresh equity of Rs 153.25 crore from Japan-based Gojo & Company Inc.

According to the startup, it closed its equity round of Rs 105 crore from Gojo & Company Inc. earlier in May 2020. Surmounting to total of Rs 260 crore funding, it is the biggest capital infusions received amidst the pandemic by any MFI in the Indian Microfinance Industry.

"The capital raised will be used in appropriate custom to expand our operations to a broader spectrum, thereby providing much-needed financial access to women micro entrepreneurs for their livelihood rehabilitation", said Vivek Tiwari, MD, CEO and CIO of SATYA MicroCapital Ltd.

Tiwari added, "It is a moment of sheer privilege for SATYA MicroCapital Ltd. We are extremely grateful for the unmatched belief Sanjay Gandhi and Taejun Shin have endowed in our organisation. Receiving this sort of new and fresh capital infusion validates the business model of any MFI, complemented by an exponential boost in its confidence. Definitely this will re-foster investors' confidence back in the sector.”

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Operational since January 2017, SATYA MicroCapital is an RBI registered NBFC-MFI. The startup claims to have provided microloans to more than 4.5 lakh self-employed women micro entrepreneurs across 21 states in the country in its four years of operational journey.

It offers collateral-free credit to micro enterprises on the basis of a credit assessment platform and a centralised approval system.

The company said it had adopted a unique Limited Liability Group (LLG) model for extending loans and ensuring repayment. The model distributes the liability among each group member, which exists only up to 10 instalments in bi-weekly collections.

Commenting on the investment, Sanjay Gandhi, Founder & Chief Investment Officer, Gojo & Company Inc. said,

“This equity infusion will support SATYA in its quest to address the needs of a large number of ever-growing clients. The year was a very difficult one, and I was witness to how well SATYA was led by Vivek Tiwari to manage the numerous COVID-induced challenges. During the initial period of the pandemic, when lockdown was still on, SATYA was the first MFI to respond through a brave humanitarian effort, when they supported thousands of migrants who were walking back to their villages, by providing them food through SATYA Rasoi.

"Vivek used the lockdown period very well to strengthen the organisation's ability to make use of technology infrastructure for a better client experience. Now, with business slowly returning back to normal, SATYA is well poised to resume its climb towards becoming one of the largest and the most admired NBFC-MFI.”