Basix to receive Rs 800 cr funding from banks and investors

Microfinance Focus, August 8, 2011: As one of India’s largest and oldest microfinance institution, Bhartiya Samruddhi Finance Ltd (Basix) wobbled towards a near collapse, banks and existing investors have come to rescue the organization with fresh funding commitments worth Rs 800 crores.

According to a Livemint report, Basix promoter Vijay Mahajan said that he has received commitments worth around Rs. 800 crore from nine banks and private institutional investors—most of them existing investors—to help it stay afloat. “This is indeed a lifeline for us”, he said.

BSFL will receive Rs. 500-600 crore from commercial banks and Rs. 100 crore from five institutional investors—International Finance Corporation (IFC) Washington, Matrix Partners, Axis Bank Ltd, Hivos-Triodos Fund and Lok Capital Llc. Small Industries Development Bank of India (Sidbi) and HDFC Bank Ltd will give it Rs. 75 crore and Rs. 25 crore, respectively, as preference capital.

Late last month, Vijay Mahajan said that it would be unlikely for Basix to survive beyond next few months if it doesn’t receive fresh funds. The company has accumulated bad loans to the tune of Rs 450 crores since the Andhra Pradesh crisis hit the Indian microfinance sector in October last year.   As of 30 June, BSFL’s net worth was Rs128 crore, down from Rs230 crore in September 2010.

With fresh funds flowing in, Basix plans to take its performing loan portfolio to Rs. 1,200 crore from Rs. 600 crore right now and to around Rs. 1,500 crore by December.

Post new comment

The content of this field is kept private and will not be shown publicly.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Allowed HTML tags: <a> <em> <strong> <cite> <code> <ul> <ol> <li> <dl> <dt> <dd>
  • Lines and paragraphs break automatically.

More information about formatting options

CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

Sponsored Links

Microfinance Focus


Copyright @ Microfinance Focus. All rights are reserved. Managed by Ekayana Media