Grameen Capital India Launched
India, January, 14 2008 -
Grameen Capital India Limited (GCI), a company formed to increase the number of poor clients reached by MFIs and livelihoods finance providers in India by integrating them into the formal financial markets, was launched today in Mumbai.
GCI is a collaboration between Grameen Foundation, IFMR Trust and CFIL in India, to develop capital markets, primarily the domestic capital markets, for MFI issued paper, including straight bonds, Micro Finance Asset Backed Securities (MFABS) and equity. Present on the occasion were Mr. Alex Counts, President, Grameen Foundation, Mr. Nachiket Mor, President, ICICI Foundation, and Mr. Sanjay Nayar, CEO, Citi India. The CEO of the newly formed Grameen Capital India is Mr. Royston Braganza.
GCI will implement innovative financing structures enabling MFIs and livelihood finance providers to access substantial amounts of untapped domestic capital.
India is a country where demand for microfinance among the poor far exceeds supply. Fewer than 10 percent of the 75 million households that could benefit have access. One of the greatest barriers is the industry’s lack of capital. Grameen Capital India's role in this sector will be to structure additional securitization transactions to help secure this much-needed capital. The Nobel laureate, Prof Muhammad Yunus, refers to GCI as a unique “social business” set up “to facilitate access to local capital markets for Indian MFIs” in his latest book Creating a World Without Poverty.
The key businesses of GCI will be to provide:
• Structured Finance products for MFIs to access capital markets
• Advisory services to MFIs and commercial investors
• Development of generally-accepted financial and management standards by MFIs
• Development of a common set of MFI/Bank data interaction standards for India
Said Mr. Alex Counts, President, Grameen Foundation, “Grameen Capital India will be a strong vehicle for providing India’s rapidly maturing microfinance sector with the sophisticated financing structures it needs for continued growth and success. We are pleased to join forces with IFMR and Citi India in creating this unique financing intermediary in one of the most important microfinance markets, and under Royston Braganza’s leadership, we hope GCI will become a model for the broader industry.”
Mr. Nachiket Mor, President, ICICI Foundation, said, “Grameen Capital India will implement innovative financing structures allowing MFIs to access available, untapped Indian capital. It is estimated that over 400 million people in India do not have access to financial services, and GCI will enable MFIs to grow themselves so that they may cater to this large segment of the population. We are delighted that with strong partners in Grameen Foundation, CIFIL and IFMR Trust, Grameen Capital India has been formed to serve the growing need of this sector.”
Mr. Sanjay Nayar, CEO, Citi India, said, “Grameen Capital India Pvt. Ltd. will break through the capital constraint barrier that has prevented the sector from growing as quickly as it is otherwise capable. Citigroup in India is committed to development of inclusive financial solutions and are proud to be partnering this path-breaking effort.”
Mr Royston Braganza, CEO, GCI, said, “Scalability and sustainability are critical for microfinance to achieve its potential in India. For this both the availability and the cost of funds are key concerns. GCI, through innovative product structuring and capital markets engagement, seeks to address these aspects, enabling MFIs to sustainably scale-up.”