ACCION International has invested $500,000 for a 49.5 percent equity stake in Saija Finance Private Limited, a microfinance start-up based in India. The investment was made through ACCION’s equity investment arm, the ACCION Gateway Fund, and represents the fund’s fourth investment in India.
ACCION International, a pioneer and leader in global microfinance, announced today that it has invested $500,000 for a 49.5 percent equity stake in Saija Finance Private Limited, a microfinance start-up that provides financial services to microentrepreneurs and low- and middle-income families in one of India’s most underserved regions.
The investment was made through ACCION’s equity investment arm, the ACCION Gateway Fund, and represents the fund’s fourth investment in India. Other Gateway investments in India include Swadhaar FinServe, Lok Capital and United Villages.
Based in the city of Patna, state of Bihar, Saija was founded by entrepreneurs and husband and wife team S.R. Sinha and Rashmi Sinha, and currently operates two branches in that city. Registered as a non-banking financial company (NBFC), it is the only Bihar-based microfinance institution, and serves the country’s poorest state. Bihar, with a per capita income of approximately $160, a 90 percent illiteracy rate, and 37 million of its 90 million people living below the poverty line, is one of the most densely populated agglomerations of poor people anywhere in the world, reports the World Bank.
Over the next five years, Saija plans outreach to households in several of the poorest states in India: Bihar, Jharkhand, Chhattisgarh, Madhya Pradesh and Uttar Pradesh. Saija aims to serve 400,000 customers by 2014 with group and individual loans, microinsurance and remittances, and will also roll out financial literacy training, as well as consumer protection assessment work through ACCION’s Center for Financial Inclusion.
For the last year, ACCION has been providing technical assistance to Saija, primarily through the secondment of commercial and operations managers. Going forward, ACCION’s technical assistance will assist Saija in testing and deploying innovative technologies and delivery channels, such as mobile phone-based payment services or point of sale (POS) terminals. With its investment, ACCION will also play an active governance role in the organization, joining founders S.R. Sinha and Rashmi Sinha.
“Bihar faces some of the most extreme poverty in the world,” said Michael Schlein, president and CEO of ACCION. “It is a very difficult environment. And yet, in a relatively short time, Saija has shown that it has what it takes to thrive and innovate in one of the world’s most challenging markets. We’re delighted to partner with Saija in its drive to deliver a full array of financial services to a vastly underserved population.”
“As we ramp up our outreach to India’s poorest states, we are fortunate to have ACCION as a partner to help us grow in the right way, mindful of the needs of our customers and with the technical know-how to develop cutting-edge services tailored to those needs,” said S.R. Sinha, co-founder of Saija.
About ACCION in India
ACCION first launched microfinance operations in India in 2005, in order to make a substantive contribution to the outreach and impact of microfinance in major urban areas. Through its subsidiary, ACCION Technical Advisors India, headquartered in Bangalore, ACCION today provides management services, technical assistance, training and investment to MFIs across the country. Current partners include Swadhaar FinServe in Mumbai; YES SAMPANN, the microfinance initiative of YES Bank, also in Mumbai; Grameen Financial Services Private Limited, in Bangalore; and now Saija Finance in Bihar. ACCION also runs an industry training center in Bangalore, and has recently expanded its successful client education program, ‘Dialogue on Business,’ to meet the unique needs of the sub-continent.
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