Private equity investment in Utkarsh Small Finance Bank

responsAbility expands Indian microfinance portfolio

Zurich, 11 October 2017 — A responsAbility-managed private equity vehicle has completed the acquisition of a 4.99% shareholding in Utkarsh Small Finance Bank. Focusing on rural and semi-urban areas, the non-listed Varanasi-based company operates in 10 Indian states, with a strong presence in the large states of Uttar Pradesh, Bihar, Maharashtra and Madhya Pradesh.

Established in 2009, Utkarsh quickly grew to become a top 10 microfinance institution by offering joint liability microfinance loans and a variety of other products and services. In January 2017, Utkarsh transformed into a Small Finance Bank supervised by India’s central bank RBI. The bank’s 4,000 staff serve over 1.2 m active borrowers through 400 banking outlets including General Banking Outlets, Micro Banking Outlets, Retail Assets (MSME and Housing Loan) Outlets and Microfinance Branches across 10 states.

The responsAbility-led investment vehicle is acquiring 4.99% of shares in the bank’s parent company. This is the second investment by responsAbility in the recently created Indian Small Finance Bank sector, following its investment in Suryoday Small Finance Bank in 2016.

Utkarsh’s main product is joint liability groups, i.e. group loans for women in rural areas, with an average loan size of about USD 200. The Bank also has a growing portfolio of individual small and micro business loans and housing loans and distributes government-sponsored pension products. Having successfully converted to a deposit-taking bank, Utkarsh has further expanded its product offering by adding deposits and savings products.

Michael Fiebig, Head of Equity Investments Financial Institutions at responsAbility Investments AG, explained: “India is one of the largest microfinance markets in the world. While there is considerable competition in general, Utkarsh’s core operations areas are among the most underpenetrated in India. This investment allows us to participate in a leading financial institution with excellent growth prospects and a strong focus on financial inclusion of broad sections of the population, which has a strong development impact.”

Speaking on behalf of Utkarsh Small Finance Bank, Mr. Govind Singh, MD & CEO said; “The investment has further strengthened our belief and commitment towards the financial inclusion; by providing affordable and accessible banking services with right technology, process and people even in the hinterlands, where it is needed the most. We look forward to gain from the experience of responsAbility.”

He further added that the full banking services of Utkarsh Small Finance Bank has been mega launched by the honourable Prime Minister of India; noting its appreciation for untiring Utkarsh Team endeavours.


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About Utkarsh Small Finance Bank

Utkarsh Small Finance Bank Ltd. is RBI licenced Small Finance Bank. Headquartered at Varanasi, Uttar Pradesh, the bank has operations in states of  Bihar, Chhattisgarh, Delhi-NCR, Haryana, Himachal Pradesh, Jharkhand, Madhya Pradesh, Maharashtra, Uttarakhand and Uttar Pradesh.

Utkarsh Micro Finance is the promoting company for Utkarsh Small Finance Bank. Utkarsh Micro Finance started its operations way back in September 2009 to provide financial and non-financial services in its area of operations to the unbanked population who have the skill but are in need of capital. Initially, it started with credit under Joint Liability Group (JLG) model and subsequently it also added  having Micro, Small & Medium Enterprise (MSME) loans (MSME) and Housing Loans in its bouquet of financial services.

About responsAbility Investments AG

responsAbility Investments AG is a leading asset manager in the field of development investments that offers professionally managed investment solutions to private, institutional and public investors. The company supplies debt and equity financing to firms in emerging economies and developing countries.

responsAbility currently has USD 3.1 billion of assets under management invested in over 550 companies in 97 countries. Founded in 2003, the company is headquartered in Zurich and has local offices in Bangkok, Hong Kong, Lima, Luxembourg, Mumbai, Nairobi, Oslo and Paris. Its shareholders include a number of reputable institutions in the Swiss financial market and its own employees. responsAbility is regulated by the Swiss Financial Market Supervisory Authority FINMA.

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