Bangladeshi Microfinance Firm ASA Gets Largest Funding Of $125 Million

Friday, February 22, 2008

Bangladesh is the home of grameen banking. Now the country will have another distinction with a microfinance institution (MFI) headquartered in that country receiving the world’s largest ever funding for an MFI. ASA International, which has presence in Asia and Africa, will receive about $125 million from Catalyst Microfinance Investors (CMI), a leading private equity fund focused on investing in microfinance institutions on a commercial basis.

CMI has achieved its final private closing with total capital commitments of $125 million from leading international institutional and private investors such as the Dutch pension fund, ABP, and US investor financial services organization, TIAA-CREF, besides others. CMI intends to use most of these funds for the growth of ASA.

To put this deal in context, Indian MFI deals have been much smaller compared to this one. SKS Microfinance recently raised $37.5 million from Silicon Valley Bank and others, in addition to $11.5 million from Sequoia Capital India last year. Similarly, another large deal was $27 million in Share Microfin (see this post). But Bangaldesh’s ASA eclipses all of them.

ASA International is one of CMI’s major investments vehicles, managed in partnership with ASA of Bangladesh, one of the world’s largest microfinance institutions. It claims to serve over 6 million micro-entrepreneurs from more than 3,000 branches. CMI and ASA International has already startde operations in Cambodia, Ghana, India, Nigeria, Pakistan, the Philippines, and Sri Lanka, and they expect to become operational in China and Indonesia later this year, a release said.

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Source: VC Circle (link opens in a new window)