SATYA MicroCapital Secures INR 105 crore from Japanese Firm,Gojo & Company Inc

A steep decline in economic activities is visible as the hold of Coronavirus tightens. The contagion has not been controlled aptly despite a two-months-long lockdown, which affected businesses across the nation. The lockdown has impacted every business in a small or large manner. Microfinance sector, which lends money to several Self Help Groups (SHGs) and small businesses, has also staggered during the lockdown. As a result, similar to other sectors, the microfinance companies have shelved expansion plans in the current fiscal.  

Amid rising tensions, some investors still believe in the potential of microlending firms and are supporting them during tough times. Of late, Delhi-based microlending firm, SATYA MicroCapital Ltd has garnered INR 105 crore in the form of equity funding from Gojo & Company, Inc. 

The company will be employing the fresh capital for employment generation and livelihood rehabilitation across the country.

"We are grateful to Gojo & Company, Inc. for their continued belief in us. This shows trust of our investors in the company, as well as in the MFI industry, which is exceptionally praiseworthy. The extent of confidence Sanjay Gandhi and Taejun Shin have fostered in our organization holds paramount significance for us and serves as a clear indicative of our substantial strength, intrinsic values, and reliability. This further validates our business model and the responsible growth we have achieved in the last three years. Yielding capital infusions like this during the hazardous outbreak of such a pandemic is rare," Vivek Tiwari, MD & CEO, Satya MicroCapital Ltd said in the company’s official statement. 

Giving Back to the Economy   

To avert turbulence begotten by a lethal contagion, India entered a lockdown. The aftermath of the move is likely to severely affect the fiscal 2020-21. In such times, the microlending firm, SATYA aims to successfully regulate the funds by conforming with responsibility toward the exodus of migrant people and poor people, who are suffering due to the pandemic.

"We are certain that the capital infusion will serve as a driving force to SATYA for reinforcing its vision of being a catalyst for the socio-economic upliftment of 5 million households by the year 2025, which will enable us to empower more and more entrepreneurs from the underserved sections of society," Tiwari stated.

Gojo & Company Inc, which is a Japan-based holding company of microfinance institutions, aims to offer financial support to everyone in developing countries via microfinance institutions (MFIs). 

"It gives Gojo great pleasure to close the INR 105 crores equity funding round with Satya Microcapital Limited. Despite these tough COVID times, Gojo's confidence in Satya remains as strong as ever. We are positive that Vivek Tiwari and the highly committed Satya team will make the best use of the fresh equity and continue with its journey to provide financing support to micro entrepreneurs across the nation. With Vivek at the helm of affairs, we do believe that in the days ahead, Satya will emerge stronger and we will see more adoption of technology to make Satya the MFI that will set the highest standards for others to emulate," Sanjay Gandhi – Founder & Chief Investment Officer, Gojo & Company Inc. informed in the company's official statement.  

Gojo is based in Tokyo and has its branches in several countries like Cambodia, Sri Lanka, and Myanmar.

SATYA, which commenced its operations in January 2017, is mainly focused towards rendering a consistent and vital passage for making financial services accessible to small sections of the society. It claims to cater to a wide client base of 3.8 lakh which primarily include married women owning businesses and ascertaining for means of expansion, and income growth. The company essentially serves low-income, and underserved entrepreneurs by giving microloans across rural and semi-urban areas in the country. 

The company asserts to have an immense presence in more than 15,000 villages through over 145 branches beyond 22 states. It also plans to increase its presence, in turn, for extending its distinguished financial services in a broader spectrum.

What’s Ahead for MFI 

According to The Economic Times, microfinance firms and small finance banks are desperately looking to boost repayment collection to revive cash flow and resume loan disbursement to restore normalcy in credit cycle even as the Reserve Bank of India (RBI) extended moratorium on payment till August 31 for borrowers under stress.

The market is largely depressive presently and thus, MFI is also grappling for survival amid others. However, the sort of sectoral confidence and strength MFI industry has illustrated in the past, serves as an imperative evidence that MFI strata will play an integral role in eradicating the domestic distress via credit-based poverty reduction strategy and will relevantly develop the underserved at an exponential speed.