Kolkata-based microfinance institution Village Financial Services (VFS) is expecting a fund infusion of Rs. 10 crore by the end of this month or by mid-February

According to Kuldip Maity, Managing Director and CEO, VFS Pvt Ltd, the Tier-II capital infusion will be done by a non-banking finance company as Tier-II capital.

“If things go as planned we might witness a fund infusion of Rs. 10 crore from an NBFC by end-January or mid-February,” he said on the sidelines of the Eastern India Microfinance Summit, 2016.

VFS has also obtained approval for another equity infusion of Rs. 3 crore from the Small Industries Development Bank of India (SIDBI); it is currently in the processing stage.

The MFI has a net worth of Rs. 32 crore and is mainly promoter-owned.

According to Maity, the company is looking to double disbursals this fiscal to around Rs. 400 crore. In the first nine months (April to December), its disbursals stood at Rs. 340 crore. Last fiscal (FY15), disbursals stood at Rs. 200 crore.

Similarly, the loan outstanding (the loan book after deducting repayments) stood at Rs. 170 crore — a 59 per cent growth over last fiscal’s Rs. 107 crore — for the first nine months of FY16.

“We expect the loan book to be to the tune of Rs. 200 crore by the end of this fiscal,” he said.

So far, the MFI has borrowed around Rs. 180 crore, mostly from banks (for this year) at around 15 per cent.

The average ticket size of its loans — to women self-help groups — is Rs. 10,000-50,000 and it charges 23 per cent interest. It has a recovery rate of over 99 per cent.

VFS is also looking to expand into five more states by the end of this fiscal.

While its current operations are in West Bengal, Bihar, Jharkhand and Assam, the MFI is looking to start operations in Tripura this month. Sikkim, Odisha and Uttarakhand are the other states where it is planning to expand operations by March.

“By 2020 we plan to be in 20 states,” Maity said.

Related Topics
comment COMMENT NOW