IFC leads $200 mn debt investment in Mahindra Finance
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Mahindra & Mahindra Financial Services Ltd, a non-bank lender commonly known as Mahindra Finance, said on Monday it has raised $200 million (about Rs 1,435 crore) in an investment round anchored by International Finance Corporation.

IFC, the private-sector investment arm of the World Bank Group, has invested $75 million from its own account and is mobilising another $125 million as parallel loans, Mahindra Finance said in a statement.

The announcement comes months after IFC said in April that it was planning to invest $75 million in Mahindra Finance via three-year senior, secured debt and that it might mobilise an unspecified amount of additional funding from other investors.

Mahindra Finance also said that it would use the capital to create a pool of financing for micro, small and medium enterprises (MSMEs) in low-income states. It has itself committed $225 million to this pool.

The company will earmark at least $100 million for women-owned MSMEs, it said, adding that this amount will be supported by blended finance from the IFC-Goldman Sachs’ Women Entrepreneurs Opportunity Facility.

The investment in IFC is part of its efforts to back non-banking finance companies in India, especially those that operate in low-income states or those who cater to women and MSMEs.

Hemalata Mahalingam, manager in the financial institutions group for South Asia at IFC, said that the organisation has been systematically supporting Indian non-banking finance companies to expand financial services for MSMEs.

“Although the financing needs of rural and women-owned enterprises are not radically different, the level of financial exclusion is higher. The dedicated gender line and focus on unreached segments will contribute to addressing these gaps and demonstrate the commercial viability of investing in women and low-income groups,” she said.

Mahindra Finance, which has more than 1,300 branches and assets under management of over $10 billion, also said that it will use the fresh funding to enhance credit in rural and semi-urban regions, with customized solutions for women borrowers in low-income states.

“Availability of credit for income generation, especially to women and low-income households, will further accelerate financial inclusion," said Ramesh Iyer, vice chairman and managing director at Mahindra Finance.

Tags: Mahindra & Mahindra Financial Services Ltd, Mahindra Finance, International Finance Corporation, NBFCs

Also read: How IFC bumped up India exposure as shadow banking crisis worsened

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