Grama Vidiyal Equity Raise (Jun '09)

Grama Vidiyal raises over USD 4million of equity capital, the first equity investment in India in 2009

Tamil Nadu, India June 16, 2009: Grama Vidiyal Microfinance Private Ltd (GVMFL) is pleased to announce the successful completion of the second round of equity infusion of USD 4.25 million. GVMFL provides financial services to 400,000 microfinance clients and has a loan portfolio of over USD 40 million. The new capital will be utilized to support the company's major expansion plans over the next twelve months and meet the enhanced capital adequacy norms set by the Reserve Bank of India.

“During these economic times, we are very pleased to receive the unwavering support of our existing investors, Unitus Equity Fund (managed by Elevar Equity Advisors) and Amar Foundation, and our new investor, MicroVest,” said S. Devaraj, Founder & CMD of GVMFL. “From the very beginning, MicroVest’s team members have been extremely knowledgeable and consultative on issues surrounding our business. Their international network and outstanding reputation in the field of microfinance will be of great value to us as we expand our services and outreach."

“We are extremely pleased with our investment in such a renowned company as GVMFL,” said Gil Crawford, CEO of MicroVest. “This is our first investment in India so choosing the right company to mark our foray into the Indian market was critical. Their management team is exceptional and we look forward to supporting them in future endeavors.” The investment in GVMFL came from MicroVest II, MicroVest’s newly launched equity fund, which invests with Tier I microfinance institutions. MicroVest II investors include large institutional and private investors.

“This successful capital raise is a reflection of the GVFML’s’s superb results and market leadership in Tamil Nadu.,” said Chris Brookfield, Managing Director of Elevar Equity Advisors (which manages the Unitus Equity Fund -I & Unitus Equity Fund - II), the management company of the UEFI and a board member of GVMFL. “GVFML has successfully employed the resources of commercial capital to advance its goal to provide opportunities for the poor. We are delighted to be a long term investor in their efforts. "

This equity raise is the first in India in 2009. It comes at a time during very difficult market conditions. Unitus Capital (UC) acted as financial advisor to GV during the equity raise. Eric Savage, Managing Director of UC, commented, “These are very challenging times for MFIs raising capital and having a financial advisor can add a lot of value. We are very satisfied at being able to help GV raise equity under tough market conditions – investor confidence is low and valuations are on the decline. However it is still possible to find the right investor at a good price and MicroVest’s investment in GV is testament to this fact.”

Grama Vidiyal Microfinance Limited (GVMFL) is a leading and profitable microfinance institution (MFI) serving over 400,000 poor women in Tamil Nadu, India. The Activists for Social Alternatives (ASA) is the not-for-profit, Mother NGO founded by Sri. S. Devaraj the present CMD of GVMFL P. Ltd., and was named Grama Vidiyal meaning “Dawn of Rural Poor”, the microfinance program of ASA, registered as a Public Charitable Trust in 1997 and then transformed into GVMFL, an NBFC, in February 2007.

MicroVest Capital is a global microfinance intermediary that provides financial capital to growing microfinance institutions (MFIs) in emerging markets. As the first private MFI investment fund in the US, its goal is to link capital markets to the entrepreneurial poor by expanding the capacity of profitable MFIs. MicroVest is based in Maryland and was founded by CARE, MEDA, and the Seed Capital Development Fund.

The Unitus Equity Fund, managed by Elevar Equity LLC, is a global growth private equity fund focused on the underserved 4 billion in developing countries. The fund intends to bridge the gap between these underserved communities and global capital, helping to create a virtuous cycle of opportunity based on open access for all. UEF is a strategic affiliate of Unitus an international nonprofit organization.

About the Amar Foundation

Amar Foundation is a non-profit private foundation that was founded in 1987 by Vinod and Neeru Khosla. The Foundation provides support to a variety of non-profit organizations with specific focus in microfinance and education.

Unitus Capital provides financial advisory services to microfinance institutions (MFIs) and other companies that benefit the poor. UC's services include arrangement of debt and equity private placements, structured products such as off-balance sheet financings and strategic financial advisory services. UC is a strategic affiliate of Unitus an international non-profit organization.