India-based IFMR has facilitated debt financing of more than US$4.5 billion to fintech microfinance and agriculture companies serving the BoP of the society
Chennai-based IFMR Capital, a provider of capital market access to financial institutions serving the bottom of the pyramid of the society, has raised US$25 million in funding from Eight Roads Ventures, the proprietary investment arm of Fidelity International Limited.
This deal marks IFMR’s second round of institutional funding. The fresh funding will help IFMR grow its existing business and explore other opportunities across new products and sectors.
Kabir Narang, Partner and Head of Technology and Financial Services at Eight Roads Ventures India, will join the Board of IFMR Capital.
Announcing the fund raise, Kshama Fernandes, Managing Director and CEO of IFMR Capital, said: “IFMR Capital helps connect high-quality financial institutions working with underserved segments to debt capital markets. These segments are largely catered to by specialised NBFCs who often find it difficult to raise capital.”
“As investors with deep understanding of these sectors, we underwrite risk and connect these originators to the right pools of capital, enabling them to grow in a sustainable manner. We are excited to partner with Eight Roads Ventures and leverage its deep knowledge of the financial services sector to foray into new sectors and develop innovative products that will further serve the needs of our partner originators,” Fernandes added.
In India, a large proportion of institutions addressing financial exclusion lack access to institutional credit themselves. There is-a significant “missing middle” segment, left out by the mainstream credit delivery channels which financial institutions with specialised models of lending to the informal segment require. IFMR Capital serves as a bridge for such institutions, enabling them to raise funds from the capital market.
IFMR Capital was established in 2008 with a focus on the microfinance sector. Today, IFMR has expanded its client base to more than 100 financial institutions across affordable housing, small business, vehicle, agriculture finance, small finance banks and microfinance, serving over 25 million clients located in more than 500 districts of the country.
Over the last eight years, IFMR has facilitated debt financing of more than INR30,000 crore (US$4.5B) to these institutions. In addition to expanding its originator and investor coverage, IFMR has successfully launched three domestic funds offering mid- to long-term debt funding to its partner originators.
Eight Roads Ventures backs entrepreneurs with aspirations for greatness. By combining a collaborative approach with the strength and resources of the Fidelity network and a near 50-year history of investing, Eight Roads helps companies across the globe accelerate their growth. Its investments include BankBazaar.com, Icertis, Laurus Labs, Manthan Systems, Netmagic (NTT), Shadowfax and Toppr and Transpole (SBS).
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