12th December, 2016, Lucknow, India – SONATA Finance Pvt. Ltd., a Lucknow based NBFC Microfinance Institution, promoted by Anup Kumar Singh, announced that it has closed its equity round of INR 85 crore (USD 12.5 million), by Proparco (a subsidiary of Agence Française de Développement (AFD) focused on private sector development) and Triodos Fair Share Fund and Triodos Microfinance Fund, funds under the management of Triodos Investment Management The round was a combination of primary and secondary transactions.
Unitus Capital was the exclusive financial advisor to SONATA and its shareholders for the transaction.
During the round, some of the existing investors, viz. Michael and Susan Dell Foundation and Caspian Funds got partial exit from the Company.
SONATA Finance Pvt. Ltd. is one of the few MFIs that has an exclusive focus on the Northern states of India – one of the most impoverished regions of the country and one that has limited access to credit.
Speaking about this transaction, Anup Kumar Singh, Promoter and Managing Director of Sonata said, “There is a new chapter unfolding in the microfinance space in India. A chapter of positivity that brings together opportunity, entrepreneurship, talent, regulation, and funding. SONATA, a key beneficiary of this positivity, has been able to demonstrate that it is capable of delivering strong social impact while building a sustainable business model. However, there remains areas that are currently unbanked and areas where clients seek product innovation. We are very excited to have the support of Proparco and Triodos, who believe in SONATA’s vision of serving the BoP population in Northern India and have committed to provide their guidance to help us become one of the leading MFIs in India.”
Pauline Angoso, Investment officer at Proparco said, “We are very enthusiastic to become a shareholder of this microfinance institution committed to social performance and excited to support its development in favor of the poor and rural populations leaving in the northern regions of the country. Proparco also wishes to bring to SONATA its experience in the microfinance sector in other countries by being part of its governance.”
Caspar Sprokel, Head of Equity at Triodos Investment Management: “This is an exciting new equity investment in India. We strongly feel that our missions are very much aligned and we look forward to be part of Sonata’s continuing journey to expand its outreach to the underserved population in northern India. Furthermore, we’d like to share our sustainable banking knowledge and expertise and to participate in Sonata’s governance and strategic development.’
Abhijit Ray, Co-Founder and Director of Unitus Capital added, “We believe the granting of in principle approval for Small Finance Bank license to 8 microfinance institutions is a watershed moment in the microfinance history in India. This reaffirms the regulator’s faith in the sector and a signal that all MFI must embrace innovation at the earliest. We feel that once SFB licenses are available on tap, SONATA will be a key contender for the license. This investment by Proparco and Triodos will help SONATA consolidate its base further and broad-base its business strategy to be able to build necessary capabilities for becoming a bank. Unitus Capital is proud to be associated with this transaction and we remain committed to ensure access to capital to the sector.”
SONATA is an NBFC-MFI operating in 6 states of Uttar Pradesh, Madhya Pradesh, Haryana, Bihar, Uttarakhand and Rajasthan with a gross portfolio of around Rs. 1,200 crore. SONATA has one of the strongest operational management team in microfinance with key employees having years of on-the-ground experience in microfinance. Despite functioning in one of the most underserved and poorest regions in India, SONATA remains profitable, enjoys considerable client confidence and great relationship with Banks and FIs. Investors in SONATA’s earlier rounds included Creation Investments, India Financial Inclusion, Bellwether Microfinance Trust, Caspian Impact Investments Private Limited, The Michael & Susan Dell Foundation, Samridhi Fund and Swaminathan Aiyar – a leading economist.
Additional information on Sonata is available on its website www.sonataindia.com
Proparco is a subsidiary of Agence Française de Développement (AFD) focused on private sector development. It has been promoting sustainable economic, social and environmental development practices for almost 40 years. Proparco provides funding and support to both businesses and financial institutions across Africa, Asia, Latin America and the Middle-East. It seeks to partner projects in key development sectors – infrastructure (with a specific focus on renewable energies), agribusiness, financial institutions, healthcare and education, etc. – and to boost the contribution of the private sector to achieving the sustainable development goals adopted by the international community in 2015. As a means to this end, Proparco finances businesses that are instrumental in creating decent jobs that pay decent wages, in supplying essential goods and services and in battling climate change.
Additional information on Proparco is available on its website www.proparco.fr
About Triodos Investment Management
Triodos Investment Management connects investors who want to make their money work for positive change with innovative entrepreneurs and sustainable businesses doing just that. It manages investment funds in sectors such as Energy & Climate, Inclusive Finance and Sustainable Food & Agriculture, with a total value of EUR 3.1 billion. The Triodos inclusive finance funds provide finance to 100+ financial institutions in 45 countries. They hold equity stakes in 25 financial institutions and actively contribute to the governance of these institutions.
Additional information on Triodos Investment Management is available on its website www.triodos.com/en/investment-management