Svatantra to acquire Navi Group’s microfinance subsidiary for $178.6m
Indian microfinance company Svatantra Microfin is set to acquire Chaitanya, a wholly-owned microfinance subsidiary of Navi Group, for $178.6 million.
Svatantra is set to acquire Chaitanya for $178.6m
The deal, one of the biggest in the microfinance sector in India, is expected to be completed by the end of this year, subject to regulatory approvals and customary closing conditions.
On completion of the acquisition, Svatantra, which provides microloans to women entrepreneurs in rural India to help them become economically self-sustainable, says it will become the second largest microfinance entity in the country with combined assets under management of around $1.5 billion, and more than 3.6 million active customers through 1,500+ branches across 20 Indian states.
Founded in 2009 and acquired by Navi’s chairman and CEO Sachin Bansal in 2019, Chaitanya similarly focuses on providing digital financial services to customers in rural India, including access to credit. Since its acquisition by Navi Group, the company has seen a compounded growth rate of 77% year-on-year.
Bansal says the transaction is “in line with our strategic plan to focus on our digital-first businesses”, adding that Svatantra is a “good fit” for Chaitanya.
“The proposed acquisition will propel Svatantra to a significant leadership position,” comments Ananya Birla, founder and chair of Svatantra. “The combined entity will command a substantial reach, enabling the delivery of a diverse array of financial services to our clients across a geographically diverse portfolio.”
The news follows Chaitanya failing to secure a banking licence from the Reserve Bank of India last year, causing a dent in Bansal’s larger ambitions to take Navi Group public via an IPO.
