Grameen Koota, a Bangalore headquartered microfinance institution with operations in South India is looking at raising Rs 100 crore in equity and expects to close the placement within the next couple of months. Grameen Koota plans to use the funds raised to meet its credit requirements, and also as capital for it’s soon to be launched micro housing subsidiary.
Speaking to the media Mr Suresh Krishna,Managing Director of Grameen Koota said that they are waiting for a licence from the National Housing Bank and the new subsidiary will offer financial and technical support for affordable homes in urban and semi-urban areas. The Micro housing arm is expected to begin operations by October this year.
The initial capital required will be Rs 2 crore, said Mr Krishna, adding that the company will not need much capital in its first year of operations. Though the company will initially be a wholly-owned subsidiary of Grameen Koota, there are plans to rope in an equity partner in the near future, he added.
Micro Housing Loans
Grameen Koota’s Micro Housing Loans would start from Rs 30,000 and go upto Rs 7 lakh. For urban areas, the maximum ceiling on credit would be Rs 7 lakh, while for the rural and semi-urban areas, it would be Rs 1.5 lakh. Since the business would involve a largely unorganised sector, the challenge would lie in correctly assessing the borrower’s income said a representative from Grameen Koota.
Grameen Koota is looking to close this year with a million customers and currently they have about five lakh customers. Grameen Koota’s credit book is currently Rs 350 crore which they plan to double to Rs 700 crore, by the end of this financial year.
Grameen Koota is also looking at doubling its staff and add another 100 Branches to it’s existing 150 branches. Grameen Koota also plans to foray into Madhya Pradesh soon. It currently has microfinance operations in Karnataka, Tamil Nadu and Maharashtra.