Legatum acquires majority stake in SHARE Microfin

Mumbai, May 15 (UNI) In a major boost to the country's microfinance sector, Legatum, a Dubai based privately owned international investment organisation today announced acquiring of majority stake in Hyderabad based SHARE Microfin Limited for Rs 100 crore (USD 25 million).

Legatum President Mark Stoleson and SHARE Microfin Ltd Chairman and Managing Director Udaia Kumar, have made the announcement at a joint press conference held here today.

Both Mr Stoleson and Kumar did not disclosed the exact stake, the Legatum acquiring in SHARE Microfin. However, Mr Kumar informed that Avishkar India Micro Ventur Capital Fund will also be investing USD two million. The equity base of SHARE Microfin ltd, after the infusion of funds will reach to Rs 112 crore, he said.

The transaction is subject to certain conditions to closing including corporate, regulatory and other approvals, Mr Kumar said.

Commenting on the investment, Mr Stoleson said, ''This landmark agreement marks a key moment in the continuing transformation of the microfinance sector. Legatum's investment will help to provide the scale necessary to lower costs and increase choices for India's rural poor.'' SHARE Microfin Ltd, founded in 1989, an NGO and later converted itself into and Non-Banking Finance Company (NBFC) has been engaged in microfinance, had its presence in about five states including Andhra Pradesh, Karnataka, Chhatisgarh, Madhya Pradesh and Maharashtra, wanted to enhance its base in six other states such as Uttar Pradesh, Rajasthan, Jharkhand, Gujarat, Haryana and Uttaranchal.

Describing the strategic tie up, Mr Kumar said that Legatum's investment will certainly boost microfinance industry and will also help SHARE Microfin to achieve the goal to reach six million needy people in the country.

According to him, SHARE Microfin has been indulged in providing microfinance to an individual, mainly the Self Help Groups (SHGs) had a repayment rate of 100 per cent, except few problems the institution had faced in Krishna district last year.

With the investment coming up from Legatum, the SHARE plans to come out with Initial Public Offering (IPO) in next 3-4 years and may issue bonds to raise funds from the market in order to reduce the present interest rates of 20 per cent on the loans, it was offering to the poor and needy people in various parts of the country, Mr Kumar said.

UNI