CARE has assigned a rating of BB+ to Sahayta Microfinance’s Rs 20 Crore Non-Convertible Debenture issue.
CARE’s Rating rationale
The rating is constrained by the short track record of operations of the company in microfinance sector, modest earnings profile, relatively moderate scale of operations and concentration in revenue sources. The rating is further constrained by inherent risks in microfinance industry including socio political intervention risk, regulatory uncertainty and operational risks.
The rating factors in an experienced management team, well developed loan origination & management information systems and presence in areas with relatively less penetration of microfinance. The rating also factor in the adequate capitalization and good asset quality of Sahayata Microfinance Pvt Ltd. Changes in regulatory environment, Asset quality, scale of operations, capital adequacy and profitability are key rating sensitivities.
About Sahayata Microfinance Pvt Ltd
Promoters of Sahayata Microfinance Private Limited (SMPL) initiated microfinance activities in August 2006 through a cooperative society. In September 2007 promoters acquired a non-deposit taking Non Banking Financial Company (NBFC) Shree Hari Fintrade Private Limited and subsequently they initiated micro finance activities through this NBFC.
The name of the NBFC was changed to Sahayata Microfinance Private Limited (SMPL) with effect from July 9, 2009. It provides microfinance loans based on the standard Joint Liability Group (JLG) model on short term basis to group of female individuals. It has presence in 8 states and around 71 districts of India including Rajasthan, Madhya Pradesh and Gujarat. As on March 31, 2010, assets under management stood at Rs.103.9 crore (including assigned/securitised portfolio of Rs.12.98 crore) And company’s net worth was Rs.34.94 crore.