Muthoot Microfin Limited, one of the leading microfinance institutions in India, Thursday announced that it has secured a term loan of $75 million in the form of external commercial borrowings (ECBs).
The deal was participated by Standard Chartered Bank, Doha Bank, RakBank (National Bank of Ras Al Khaimah), Union Bank of India (UK) Ltd., and Canara Bank, GIFT City, the company said in a statement.
Standard Chartered Bank was the sole arranger of the funds and acted as the social loan coordinator for the transaction.
The $75-million social loan facility has a greenshoe option of $25 million. The funds will be utilised for on-lending and financing of eligible social loans, the statement added. Some more banks are expected to join later through the greenshoe portion.
The loan has been tied up for a 3-year and 3-month tenor and benchmarked to a 3-month term SOFR (secured overnight financing rate) with a margin of 2.85%, which will be serviced at a quarterly frequency.
“The ECB will further our business objectives as we plan to utilise the fund towards facilitating microfinance loans across geographies. This strategic move not only opens avenues for international partnerships but also introduces the MFI sector to diverse international banking entities across different geographies,” said Sadaf Sayeed, CEO of Muthoot Microfin Limited.
As of December 31, 2023, the company has 3.27 million active customers served through 1,424 branches spread across 18 states and 346 districts with a gross loan portfolio (GLP) of Rs 11,458 crore.