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IFC, the investment wing of the World Bank, has offered a $25-million debt support to AU Financiers for onward investments, principally into medium and small private units.
Anup Agarwal, senior investment officer of IFC, told BusinessLine the non-deposit taking Rajasthan-based NBFC has received three rounds of equity investments from IFC since 2010.
“This month, we are allowing the first debt funding to it,” he added. The NBFC, active mainly in the vehicle financing segment, saw a business downturn following the economic slowdown.
“So we supported them to change track to the MSME sector. This has helped them enlarge their loan book 11 times,” he said.
IFC, which has committed investments of $4.5 billion in India, has been funding SIDBI as well as large private banks such as ICICI Bank, HDFC Bank, YES Bank and Kotak Mahindra. It has also been financing NBFCs such as Cholamandalam and Bandhan. It has also channelled funds to private equity and venture capital funds of Motilal Oswal, Aavishkar, Pragati, Venture East and Lighthouse for investments into the MSME sector, and made direct selective investments in small and medium enterprises or start-ups.
IFC’s equity investment (20 per cent) in Tata Capital’s special initiative in green technology start-up — Tata Cleantech Capital — about three years ago has been significant in terms of results, Agarwal added.
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