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CLSA Capital Backs Indian Microfinance Group

CLSA Capital Partners has invested $24 million into Indian microfinance group Equitas Micro Finance India Private Ltd., in exchange for a minority stake.

PRESS RELEASE

Mumbai/Hong Kong – Thursday, 1 April 2010 – CLSA Capital Partners (‘CLSACP’) is pleased to announce the investment of US$24 million by ARIA Investment Partners III L.P. (“ARIA III”), for a minority stake into Equitas Micro Finance India Private Limited (“Equitas”), one of the leading microfinance institutions in India. The
investment by the US$333 million Aria III fund closed on 27 March 2010 and is in the form of newly issued equity shares.

This is the third investment by ARIA III and the ninth investment in India by the ARIA group. Equitas provides microcredit to low income households in India. Since its inception in 2007, the Chennai based company has grown rapidly to become one of the leading players in the microcredit space in India. The company has a loan portfolio of nearly US$130 million and serves over 900,000 customers from approximately 150 branches in the states of Tamil Nadu, Andhra Pradesh and Maharashtra. Equitas also provides a variety of corporate social responsibility benefits to its customers, such as vocational training as well as quality, affordable education for their children.

CEO of CLSA Capital Partners Christopher Seaver acknowledged that the microfinance sector in India had developed into a successful and a sustainable business model which drives financial penetration to the underprivileged strata of society.

“Despite the unprecedented growth in this sector during the last five years, there remains considerable, unmet demand in the market. This supports the consensus view that there is potential for continued, significant growth in the sector,” Seaver said. Managing Director at CLSA Capital Partners Miranda Tang added: “Equitas has shown remarkable growth in South India to date. Our investment provides the capital
for the company to further expand through new branches in other parts of the country, and to enhance its equity capital and grow its loan book.”