British International Investment

ASA International India Microfinance Limited

South AsiaFinancial services

ASA International India Microfinance Limited is a microfinance institution operating in India. The company is a subsidiary of ASA International, one of the world’s largest international microfinance institutions.

This investment was made when British International Investment was named CDC Group.

Our investment

Description of the investment.

Through a pooled bond investment structure we are increasing the volume of capital deployed to smaller and more local microfinance institutions, in an environment with limited commercial appetite. The client base of these microfinance institutions are low-income and vulnerable populations, particularly women and rural borrowers located in ‘A’ states.

Impact information

Applies to investments made from 2019 onwards. The tabs in this section define what we expect to achieve through the investment, assessing the potential impact of the investment against six dimensions of impact. You can find more details on our methodology of assessing impact here.

What?

Impact
  • Sustaining and increasing economic opportunities by providing access to financial services for entrepreneurs (SDG 8.3, 8.10).
  • Enhancing resilience to economic shocks; maintaining and increasing access to microfinance for lower-income and vulnerable populations (1.4, 1.5, 5.2).

How?

How?

We will provide up to $43.3 million through the pooled bond issuance (PBI), which will extend financing to microfinance institutions and enable them to maintain and extend greater credit to their customers namely: (i) micro-entrepreneurs, enabling them to better manage cashflow and maintain or grow their business; and (ii) individuals for personal purposes, allowing borrowers to save or invest, smooth consumption and manage risk better. 98 per cent are classified as loans for income-generating purposes provided through the primary channel of group lending i.e. JLG (90 per cent).

Who?

Stakeholder Geography Characteristics
Customers

Pan-India

Lending is expected to go to underbanked, low-income borrowers in mostly the informal economy. The PBI currently reaches a 99 per cent female client base, with average loan size of the underlying borrower amounting to $331. Our commitment will substantiate existing reach of the MFIs to low-income and vulnerable populations. Reach to female borrowers is expected to remain consistent through the lifecycle of the facility.

How much?

Scale Depth/Duration

We expect to provide over 630,000 new loans through the lifecycle of the facility

  • Duration: Impact is expected to last for up to four years i.e. the duration of our investment.
  • Depth: Difficult to assess but expected to be deep given the characteristics of the borrower and the context of the COVID-19 pandemic. Impact is expected to be deeper in an environment where the counterfactual has worsened (i.e. rising unemployment, falling incomes).

Contribution/additionality

Contribution/additionality

Medium

Grid score

Grid Score

To help us direct our investments, we previously used a tool called the Development Impact Grid. It scored investments out of four, based on two factors: the difficulty of investing in a country and the propensity of the sector to generate employment. This tool was used for investments until the end of 2021. Since 2022 it has been replaced by the Impact Score.

n/a

Risk

Unexpected Impact Risk
  • Client protection considerations are heightened in the context of the COVID-19 pandemic, particularly as end-borrowers are low-income and vulnerable populations.
Evidence Risk
  • Visibility on the who and depth of impact (i.e. effect of financing on underlying borrower) is challenging, as the impact chain is long and intermediated.
Alignment Risk
  • Relates to the risk that capital is not used to increase lending.

Reporting and Complaints Mechanism

The Reporting and Complaints Mechanism allows anyone outside BII to report alleged breaches of the business integrity or environmental and social provisions of BII’s Policy on Responsible Investing. This includes breaches made by BII, a BII investee, or a portfolio company of a fund in which BII has invested. The Reporting and Complaints Mechanism Rules are available here. Reports and complaints can be submitted by email to [email protected] or by mail. See more details on our Reporting and Complaints Mechanism here.

For any other general enquiries contact us at [email protected]

  • Key facts

    Last updated

    When the last quarterly update of the website database occurred.

    :
    March 2024
    Project number

    An identifier number shared by investments in the same project.

    :
    D6496
    Status

    The current status of the investment (green flag for active and red flag for exited).

    :
    Active
    Region

    The geographical region where the country is located. We currently invest in Africa, South Asia, South East Asia and the Caribbean. In 2023, BII’s investment mandate was extended allowing it to invest in regional funds linked to Ukraine, with the majority of activity expected to begin post-war. Investments outside these regions were made prior to 2012 under previous investment mandates.

    :
    South Asia
    Sector

    We prioritise those sectors that facilitate development and need our capital the most. Our priority sectors contribute towards many of the Sustainable Development Goals. They range from investing in the power infrastructure that will provide people with better access to electricity, to investing in financial institutions that direct capital to the individuals and businesses that need it the most.

    :
    Financial services

    We provide capital in the following ways: directly – through direct equity, direct debt, guarantees and other non-intermediated financial instruments; and indirectly – principally through investment funds.

    For direct investments and fund investments, this is the date BII committed capital to the investments. This is typically the date on which legal agreements are signed by all parties.

    For the portfolio companies of our fund investments, this is the date (either the month or the quarter) on which the fund committed capital to the portfolio company.

    For direct equity investments, this is the date at which British International Investment exited the investment.

    For debt investments, this is the date at which the final debt repayment was made.

    For funds, this is the date at which the fund was terminated.

    For underlying fund investments, this is the date at which the fund manager exited the investment.

    The total amount committed, per financial instrument, per investment, on the date BII becomes subject to a binding legal obligation to provide funding or assume a contingent liability. This information is provided in US dollars.

    For direct investments, this is the amount that BII has committed to the business or project. For fund investments, this is the amount BII has committed to the fund.

    The currency in which the investment was made.

    Investment type :
    Debt
    Start date :
    March 2021
    Amount :
    $5.44m
    Currency of investment :
    INR
    Domicile

    The company or investment fund’s place of incorporation.

    :
    India

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