Asian Development Bank (ADB) last week signed a deal to provide $32-million credit to CreditAccess Asia (CAA), an Amsterdam-based microfinance holding company with operations in India, Indonesia and the Philippines.
The investment of $32 million would be to increase the capital for the growth of CAA-owned microfinance institutions under the financial inclusion policy of the asian bank. operations. In addition, ADB is providing $500,000 in the form of grant for technical assistance to expand the operations of CAA operations in the region.
CAA, which owns Graameen Koota in India, Bina Artha in Indonesia, and OnePuhunan in the Philippines, has 1.8 million customers across Asia, 99.8% of them women. It is currently planning to expand its operations in Vietnam and opt for listing by IPO route.
“Through this investment, ADB and CAA will help to deepen access to credit and finance for some of Asia’s most underserved markets,” said Christine Engstrom, ADB’s director for the Private Sector Financial Institutions Division. “CAA provides significant support in the communities in which it operates and we are happy to support them and their Asian microfinance subsidiaries through their next stage of growth.”
CAA plans to expand its customer base to 3.5 million women borrowers by 2021 with the grant and loan provided by the ADB, which carries a lower interest in comparison to local banks. “We are very pleased to have ADB on board as a strategic shareholder in CAA. ADB fully supports our mission to become a leading provider of financial products for micro and small businesses in India and Southeast Asia,” said CAA CEO Paolo Brichetti.
However, the current situation is not rosy for CAA whose Grameen Koota is facing the impact of demonetisation amid many of its peers being downgraded by credit rating agencies. With RBI not willing to extend the grace period for NPA loans, the year-end situation would reflect adversely on all microfinance institutions in India.