Arohan Financial Services raises Rs 60 crore of equity from Tano Capital

Arohan, an Intellecap group company has raised Rs 60 crore from a fund managed by Tano Capital, an alternate asset management firm founded in 2004 by Chuck Johnson, formerly Co-President of Franklin Templeton Investments and CEO of Templeton Worldwide.

Arohan is the second largest Kolkata based NBFC MFI in the country with close to Rs 400 crore assets under management across 104 branches spread over 38 districts of four states of West Bengal, Bihar, Jharkhand and Assam.

Piyush Goenka, Investment Director, Tano Capital, said, “Arohan is our first microfinance investment in India till date and given our demographics, believe that Financial Inclusion will be a big play in years to come. The Intellecap group has done pioneering work since 2007 in the sector and we are delighted to be working with them.”

Vineet Rai, Chairman, Intellecap, said, “The present government has clearly signalled utmost seriousness in achieving financial inclusion in India with initiatives like PMJDY, MUDRA and we as a group would be honoured to play our part. Our 3 NBFC’s – Arohan, IntelleCash & IntelleGrow today cover individual, tiny, micro, small & medium enterprises with loan sizes ranging from Rs 10k to Rs10 crore with a focus on low income states in central, east and NE parts of the country. We have applied to the RBI and see becoming a Small Finance Bank (SFB) as a logical next step in this journey.”

Intellecap group has recently also applied for the SFB (Small Finance Bank) licence and is very well aligned with the RBI focus on the financially underserved Central, Eastern, and North Eastern parts of the country, where socio-economic indicators and financial inclusion are the lowest, and which need more robust measures as far as removal of barriers to banking are concerned.

“We are delighted to get Tano on board as an investor in Arohan,” said Manoj Kumar Nambiar, MD, Arohan.

“The enhanced net worth will help us implement our growth plans in the 10 low income states starting with Odisha in Apr’15. We offer a wide product suite on the credit side, provide insurance and micro pension products to our clients and will soon start liability products as a BC of partner banks. We hope this equity infusion, along with our applying for a SFB license, shows our intent towards ensuring financial inclusion for the people in the states we operate in,” he added.

The MFI sector in India (over Rs.35, 000 crores of outstanding portfolio across 35 million clients) serves the underserved and the most financially excluded sections of the society. The common customer for the MFIs are often illiterate, poor, from a backward strata, yet are those who are looking to make a change in their lives by embarking on a journey of entrepreneurship. Financial exclusion is greatest in the Eastern, North Eastern and Central parts of the country.

“Arohan, which is the largest East based MFI to have applied as part of the Intellecap group application, and also has a focus on these very same regions, is a strong contender to become the next bank based out of Kolkata focusing on serving the under-served in the Eastern, North Eastern and Central parts of the country,” said the press statement.

The Intellecap group take on financial inclusion which encompasses both retail and enterprise is also a differentiator, as MSMEs provide employment to over 100 million people and creates over a million jobs each year but is estimated to have a credit lending gap of almost Rs 10 trillion.