Fusion Microfinance Pvt Ltd has raised Rs 53 crore ($8.3 million) in Series C round of funding from Belgian Investment Company for Developing Countries SA, (BIO) and Oikocredit, it said on Thursday.
Founded in 2010, Delhi-based Fusion predominantly operates in rural and semi-urban areas offering financial services to women in six states: Madhya Pradesh, Uttarakhand, Uttar Pradesh, Haryana, Delhi and Bihar through 84 branches.
With this fund infusion, Fusion aims to consolidate its position in North-Central India while looking at acquisition targets in the financial services space. Fusion will also strengthen its team and invest in new technologies to increase efficiencies and turnaround time.
Ashish Tewari, COO of Fusion Microfinance, said, “Fusion intends to use the fresh round of investment to expand not only geographically, but also through further product lines in MSME. This will cater to the crucial ‘missing middle’.”
The latest capital infusion for the Delhi-based micro-lender comes after a two-year hiatus when it raised Rs 25 crore (around $4.5 million) in a Series B round of funding from Norwegian Microfinance Initiative’s (NMI) Frontier Fund, along with existing investor Incofin-Rural Impulse Fund II.
Fusion has 2,35,000 active loan clients with Rs 325 crore ($51 million) in assets under management.
The microfinance sector has been able to attract a host of investors over the last year or so. The country’s largest MFI Bandhan, which is slated to start its banking operations, had attracted $260 million of funding from GIC and IFC this year and is expected to raise another $80 million this year. Ujjivan and Arohan have also attracted funding this year.
Satin Creditcare, another Delhi-based micro-lender, also raised $8 million on Monday.
For Belgium’s BIO, this is the second-bet on Indian MFI industry. Last year Odisha-based micro-lender Annapurna Microfinance had raised Rs 30 crore (around $5 million) in a Series B round of funding led by BIO, with participation from the existing investor Incofin Investment Management’s Rural Impulse Fund II.
BIO is a development finance institution (DFI) established in 2001 to support private sector growth in developing and emerging countries.
Oikocredit, a global social investor, has backed a bunch of Indian firms including Guwahati-based microfinance institution RGVN (North East) Microfinance Ltd (RGVNMFL) and Thrissur-based ESAF Microfinance and Investments Ltd (ESAFIL). It has also backed emerging markets impact investor LeapFrog Investments, which has an active presence in India.