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Actis sets up SME-focused lending platform in India; commits $220 mn

Emerging markets private equity firm Actis Advisors Pvt. Ltd said it will invest up to $220 million (Rs 1,484 crore) over five years in a non-banking financial company founded last year by KV Srinivasan, the former CEO of Reliance Commercial Finance.

The lender, Actis said, would focus on loans against collateral to small and medium enterprises (SMEs) operating in a dozen sub-sectors. India, said the private equity company, has over 30 million SMEs and the sector is experiencing long-term growth in demand for credit.

Called Profectus Capital, the SME-lending company will be led by its CEO Srinivasan, who quit Reliance Capital's commercial finance arm in April last year after almost a decade.

“The potential for providing finance for small businesses in India is immense," said Srinivasan, who is an IIM-A graduate with almost three decades of experience in financial services in India.

This is Actis’ second investment in 2018, again in a financial services firm. In March, the private equity company had announced a $82 million investment in Pine Labs, a payment solutions firm.

Actis has also been an investor in financial services companies IDFC and IDFC Bank Ltd.

Th private equity firm has had significant success with a platform strategy in the past. Earlier this year, it sold its green energy platform Ostro Energy Pvt. Ltd to ReNew Power for $1.5 billion.

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