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Investors linked to a Seattle-based charity stand to receive millions of dollars when a company they supported in lending to the poor in India goes public next week.
The charity, Unitus, abruptly dismissed most of its staff this month, saying it had accomplished its mission of creating an avenue for private capital to flow into microloans. However, its for-profit arm, Unitus Equity Fund, lives on and stands to receive an estimated return of about $70.4 million on the $6 million in private funds it invested in SKS Microfinance of India over the past few years.
SKS’ initial public offering is a major event in the development of the microloan industry in India. With more than 1,600 offices and 17,000 staff, SKS is the largest Indian microlender, and also the first to go public there. Many cite its success in using private capital for small business loans — typically between $40 and $200 — as proof that private investments can help alleviate poverty.
Indeed, that was one reason that Unitus founders gave for all but shuttering their organization earlier this month. “With $50 billion of microfinance capital available to more than 150 million of the world’s working poor ... we feel the time is right for Unitus to seek out other transformative fields of endeavor,” Unitus Chairman Joseph Grenny wrote in a July 14 letter to donors.
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