Hyderabad based MFI - Basix Group is planning to acquire minority stakes in development credit institutions in 10 African nations. This announcement comes a month after the MFI raised R38Cr (7 Mn Swiss Franc) from The Swiss Agency for Development Cooperation to set up developmental initiatives in Africa.
Basix intends to limit its investment in African banks and other institutions to 26%. It will initially work with them to provide technical assistance and advisory services. At present, Basix operates in three Asian countries - Papa New Guinea, Bhutan and East Timor. In Africa, it is present in Ethiopia in Africa after securing contracts from the IFC.
Hyderabad-based MFI, BFSL is promoted by Vijay Mahajan's BASIX group. It has over a 3.5 Mn customers with a staff of over 10,000 people. It works in 17 states, 223 districts and over 39,251 villages.
It has raised equity from IFC, Washington, Shorebank, Chicago; Hivos-Triodos Fund, Netherlands; ICICI Bank and HDFC. Major Lenders to BASIX include SIDBI, ICICI and HDFC. The MFI was on the verge of collapsing under the burden of bad loans after the borrowers in Andhra Pradesh refused to repay.
Presently, Basix is trying to restructure more than R700Cr in loans. It has accumulated losses of about R600Cr and over 2 million customers. The lenders have asked the MFI to bring in equity of R100r before its debt restructuring package is approved.
Recently, India became a member of Consultative Group to Assist the Poor (CGAP), an international apex body for microfinance. CGAP is an independent policy and research center dedicated to advancing financial access for the world's poor. It is supported by over 30 development agencies and private foundations, who share a common mission to alleviate poverty.
Housed at the World Bank, CGAP provides market intelligence, promotes standards, develops innovative solutions and offers advisory services to governments, financial service providers, donors, and investors.
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