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IFC, part of the World Bank Group, has anchored an investment round of $200 million in Mahindra and Mahindra Financial Services, with the aim of creating a dedicated pool to finance micro, small and medium enterprises (MSMEs) in low-income States.
Of this amount, IFC has invested $75 million from its own account and is mobilising another $125 million as parallel loans. “At least $100 million will be earmarked for women-owned MSMEs,” said a release on Monday.
The funds dedicated to women will be supported by blended finance from the IFC-Goldman Sachs’ Women Entrepreneurs Opportunity Facility. Mahindra Finance has also committed $225 million to this pool.
“To expand financial services for MSMEs, IFC has been systematically supporting India’s NBFC sector,” said Hemalata Mahalingam, Manager, Financial Institutions Group, South Asia, IFC.
Ramesh Iyer, Vice-Chairman and Managing Director, Mahindra Finance, said the availability of credit for income generation, especially to women and low-income households, will further accelerate financial inclusion.
IFC has been one of the early institutional investors in the NBFC sector, even before the fund crunch. Previously, in 2018, it invested about $100 million in Mahindra Finance to increase loans to farmers to buy tractors, commercial vehicles, and other equipment for modern farming. It also invested about $25 million in Mahindra Rural Housing Finance for housing loans to the rural poor.
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