CreditAccess Grameen Ltd, India’s biggest microfinance institution, said Monday it has secured $50 million (about Rs 435 crore at current exchange rates) from International Finance Corporation (IFC) to help enhance its operations.
The company will use the funds to provide finance to women micro-entrepreneurs engaged in agriculture and agri-related activities. The funding will help CreditAccess Grameen reach 3-4 million additional borrowers, it said in a statement. It will also use the funding to diversify and strengthen its liability profile to include long-tenor financing.
The Bengaluru-based will raise the capital as external commercial borrowings from IFC, the private-sector investment arm of the World Bank Group.
“With this $50 million commitment from IFC... we are firmly moving towards our FY28 medium-term strategy of sourcing 25-30% of funds from foreign sources while maintaining strong control over our average cost of borrowings,” said Nilesh Dalvi, chief financial officer, CreditAccess Grameen.
With assets under management of Rs 24,810 crore, CreditAccess Grameen is the largest microfinance entity in India. The company operates 2,059 branches across 16 states and one union territory. The company’s promoter is CreditAccess India B.V., a multinational company specialising in micro and small enterprise financing.
The debt capital from IFC comes after the non-bank lender posted a net loss of Rs 99.5 crore for the October-December quarter. Its asset quality worsened, too, with gross non-performing asset (GNPA) ratio rising to 3.99% as on December 31 from 0.97% a year earlier.
For IFC, the transaction adds to its growing portfolio of Indian NBFCs. Most recently, IFC disclosed that it would lend $100 million to Aditya Birla Housing. IFC’s portfolio also includes Shriram Finance, Northern Arc Capital and Vastu Housing Finance Corporation.