BANGALORE, India — Ujjivan Financial Services is pleased to announce the successful completion of the fourth round of equity infusion. Originally planned for $15.6 million (Indian Rupees 750 million), the equity round was over-subscribed and increased to $19.6 million (Indian Rupees 940 million). The incremental capital was largely subscribed by existing shareholders including Unitus Equity Fund (UEF) managed by Elevar Equity L.L.C., Bellwether Microfinance Fund, Michael & Susan Dell Foundation, A.W. Holdings and individual investors including promoter & CEO Samit Ghosh. The five new investors in this private placement transaction will include: Sequoia Capital, Lok Capital, Unitus Equity Fund II, India Financial Inclusion Fund and SIDBI. This will increase Ujjivan’s Paid up Capital & Reserves to over $22.5 million (Indian Rupees 1,080 million).

Speaking on this transaction, Samit Ghosh said, “Ujjivan has expanded the institutional investor base to create a balance between social and market driven private equity investors to ensure that that its social mission is not diluted and at the same time it can maintain the ambitious growth plans. We are very pleased to receive the unwavering support of the existing and new investors all through this transaction even under these challenging times. It is a testament to the future of microfinance industry in India.”

A unique feature of this deal was that Ujjivan, in collaboration with Bellwether Microfinance Fund and UEF, was able to offer its individual investors liquidity by offering to buy out part or whole of their investment in Ujjivan and register good value on their investments. This is the first time a microfinance institution has been able to offer a market determined exit to individual investors and will go a long way to create a secondary market for shares of microfinance companies. S Viswanatha Prasad, Managing Director, Bellwether Microfinance Fund and Caspian Advisors, said, “creating a secondary market for microfinance institutions’ stock is one more critical step in integrating MFIs to capital markets and in some sense reflects coming of age of this asset class. Bellwether is delighted that it has taken this lead role in the Indian market to provide liquidity to the investors in Ujjivan. Bellwether and India Financial Inclusion Fund are excited to be part of Ujjivan’s growth plans and are confident of its success.”

Sandeep Farias, Managing Director of the Elevar Equity said, “Ujjivan’s exceptional performance as an MFI that has balanced commercial performance with social impact makes us proud to continue our association with Ujjivan. That we have full faith in Samit Ghosh’s leadership and Ujjivan’s potential is evident in the fact that we have invested from UEF II as well into Ujjivan. We are confident that Ujjivan will benefit from the partnerships it has formed through this round of investment.”

Mohit Bhatnagar, Operating Partner, Sequoia Capital, said, “Sequoia Capital is excited to lead this new round of investment at Ujjivan. The leadership team at Ujjivan has proven that scalable & sustainable microfinance institutions, that deliver social solutions, are being built in urban and rural India.”

Venky Natarajan, Director, Lok Advisory Services expressed his enthusiasm. “Ujjivan is one of the fastest growing MFIs serving underserved clientele in urban India. With infusion of capital in this round, we believe that Ujjivan is now in a better position to increase its borrower base and increase its presence all across India. We are confident that this investment represents one of the best opportunities for supporting the growth of the microfinance in India.”

Royston Braganza, CEO, of Grameen Capital India, the Equity Advisor for this transaction said, “Ujjivan’s success is a strong indication of growing confidence of the investor community in microfinance as an asset class. Ujjivan offers a financially sound as well socially motivated growth strategy for meeting the vast unmet demand for microfinance.”

ABOUT UJJIVAN
Ujjivan Financial Services, a Bangalore based microfinance institution focusing on serving the urban and semi-urban poor, completed its third year of operation on November 1, 2008. It now operates in eight States with over 165,000 customers, has disbursed Rs.1.6 billion of loans and enjoys a repayment rate of 99.5%. The last three branches Ujjivan opened were in Jamshedpur in Jharkhand and opened its 100th branch in Nanjungud, Karnataka on November 22nd, 2008. Ujjivan is a partner of the Grameen Bank of Bangladesh. To learn more go to www.ujjivan.com.