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Muthoot Microfin Ltd (MML), the microfinance business of the Muthoot Pappachan Group, has received $50 million from private equity firm Greater Pacific Capital.
Currently, MML has 850 branches across 16 States, covering 257 districts. With this round of funding, the company will look to double its assets under management from ₹5,000 crore ($670 million) currently to ₹ 10,000 crore ($1.3 billion) over the next 2-3 years. The plan includes opening 500 new branches.
“This funding will further strengthen our balance sheet, taking our capital adequacy to over 30 per cent and allow us to support and empower an additional 1.5-2 million more low-income households,” said Sadaf Sayeed, CEO of MML.
Also read: Muthoot Finance sees net profit grow 11% to ₹994 crore in Q2
“This is the largest equity financing in the Indian microfinance sector since 2019. MML serves nearly 1.9 million women entrepreneurs across the country and is the 5th largest microfinance institution in India,” said a press release.
“GPC has provided equity as primary capital to meet the growing needs of the company, backing, MML’s plans to become one of the largest microfinance institutions in the country within the next 2-3 years,” it added.
Thomas Muthoot, Managing Director of MML, said, “We are delighted to partner with Greater Pacific Capital in furthering our mission of offering easy access to financing to borrowers across rural India who cannot access bank credit. Our investments in, and focus on, deploying best-in-class technology has allowed us to scale rapidly and profitably while addressing one of India’s biggest developmental challenges.”
Thomas John Muthoot, Chairman of MML and the Muthoot Pappachan Group (MPG), said, “We share a lot of synergies with GPC’s investment philosophy. In the coming days, you will see MPG staff playing a role of wealth manager and wealth creator for the poor. With a database of over 5 million customers, we have developed a good understanding of the entire life cycle needs of rural households.”
Akshaya Prasad, Partner and Managing Director at GPC, will join MML’s board as part of the transaction.
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