Global investors pump $150 mn into Janalakshmi Financial Services

Bangaluru-based Janalakshmi Financial Services (JFSL) has announced a $150-million (about Rs 1,000 crore) equity financing round from global investors, led by TPG Investment.

At present, JFSL is a micro finance institution; it will soon become a small finance bank. TPG Investment's headquarters are in San Francisco.

Another processes of secondary transactions aggregating $60 million (about Rs 400 crore) is also underway to provide partial exits to existing investors.

JFSL is represented in more than 184 cities across 19 states and has an assets under management (AUM) of approximately $1.65 billion (Rs 10,500 crore).

TPG's investment adds to the 2014 investment it made in Janalakshmi. Existing investors, including an investment fund managed by Morgan Stanley Private Equity Asia, Havells India and Vallabh Bhansali, also participated in the round along with new investors, JFSL said in statement.

Janalakshmi will use the new capital to drive customer acquisition and build upon current product offerings, it said.

Last September, Janalakshmi received in-principle approval from the Reserve Bank of India (RBI) to convert to a small finance bank. The current round of equity will help Janalakshmi transition to a bank structure and comply with the RBI's rules for conversion.

Janalakshmi's core product is small batch (SB) loans disbursed to joint liability groups. The microfinance institution also provides individual loans to those who have demonstrated a successful credit track record as borrowers under the SB format, as well as loans to micro and small and medium enterprises (MSMEs).

Janalakshmi's promoter is the Jana Urban Foundation, a Section 8 company that undertakes activities to deepen understanding of the challenges around financial inclusion.

The Jana Urban Foundation also addresses issues via education, skill development, community connectivity, and financial advisory initiatives.

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