Microfinance Company Of Billionaire Kumar Birla’s Daughter Is Now India’s Second Largest After Acquisition

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Commodities tycoon Kumar Mangalam Birla’s 29-year-old daughter, Ananya Birla, who started microfinance company Svatantra Microfin when she was just 17, completed the acquisition of rival Chaitanya India Fin Credit (owned by Indian billionaire Sachin Bansal) last week.

The Chaitanya deal made Svatantra the second-largest player among microfinance institutions under the non-banking finance company (NBFC) banner in terms of assets under management, which will now touch 130 billion rupees ($1.6 billion).

“We are gunning for the No. 1 position now,” she noted in a tweet right after the acquisition. Ananya appeared on the Forbes Asia Women to Watch list in 2016.

Publicly-traded, Bangalore-based CreditAccess Grameen is the No. 1 player with $2.7 billion in assets under management as of September 30, 2023 – in the $43 billion (total loan portfolio as of May 31, 2023) Indian microfinance industry, which serves 70 million borrowers across India.

“Svatantra Microfin acquiring Sachin Bansal’s Chaitanya is a positive news both for the microfinance sector and Svatantra,” says Alok Misra, CEO of microfinance industry body MFIN India. “The acquisition is synergistic as it gives Svatantra strategic outreach in South India. While Svatantra is known for its efficient operations and responsible lending, higher size will further strengthen it as also contribute to higher efficiency through economies of scale.”

Ananya incorporated Svatantra (which means “freedom” in Sanskrit) in 2012 and started operations in 2013 offering small loans to rural women entrepreneurs.

It went from 280 branches in April 2019 to 500 branches in November 2020 to more than 800 by May 2023. After the 14.8 billion rupees acquisition, it will have more than 1,500 branches across 20 states and 124 billion rupees in assets under management serving 3.6 million customers.

The primary differentiator for Svatantra is its 100% cashless disbursements.

“It’s surreal to look back over the last decade,” she said in the tweet. “Svatantra was the very first company that I founded with a vision to provide financial services to every woman in every corner of Bharat, to bank the unbanked.”

In 2018, she took over Micro Housing Finance Corp. (MHFC) for 3 billion rupees to provide housing finance services to underserved low-income urban customers. It operates on a branchless model.

The fifth generation scion of the Birla clan is the eldest of Kumar Birla’s three children. Ananya, who has an undergraduate degree in economics and management from Oxford University, also cofounded mental health initiative Mpower, along with her mother Neerja Birla.

Ananya – who also composes and sings pop music (she released her first song, “Livin’ the Life,” in November 2017) — joined the boards of Aditya Birla Group’s flagship Grasim Industries and Aditya Birla Fashion and Retail earlier this year.

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