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Fincare Business Services, a rural-centric financial inclusion platform, has raised ₹500 crore from private equity investors TA Associates, True North, Tata Opportunities Fund and LeapFrog Investments.
A number of financial institutions, including SIDBI, Kotak Mahindra Old Mutual Life Insurance and Edelweiss Tokio Life Insurance, among others, were also part of the funding.
Fincare is an umbrella holding company of micro-finance firms such as Disha Microfin, Future Financial Services and Lok Management Services. Disha Microfin has received in-principle approval from the RBI to operate as a small finance bank.
Following the investment, Indium, an investor in Fincare group companies since 2010, will remain a shareholder in the platform, along with Fincare management and promoters of the group companies.
“Today’s announcement will enable us to continue to build the infrastructure required to accelerate our growth in line with our mission to facilitate a lifetime of progress at the base of the pyramid through financial and social inclusion,” said Rajeev Yadav, Group CEO, Fincare.
India is one of the fastest growing emerging economies, with a developed financial sector. However, there is significant progress to be made in the area of financial inclusion.
According to the World Bank, just 6 per cent of adults over the age of 15 have borrowed from a financial institution, while only 9 per cent have accessed credit for a farm or business. “
‘Remarkable transformation’“Over the last six years, we have been witness to the remarkable transformation of the small micro-finance business emerging from the Andhra crisis into a high-quality, technology-driven, professionally managed, diversified financial services business focussed on rural customers.
“We are excited to be part of Fincare’s next phase of transformation into one of the most admired small finance banks in the country,” Divya Sehgal, Partner, True North, said.
Fincare is one of the fastest-growing micro-finance platforms in India, reporting an annual growth of 79 per cent in its assets under management over the last three years.
Its primary product, a joint-liability group loan, reaches over 12 lakh customers, 95 per cent of whom are based in rural areas. The platform operates over 270 offices in seven States in the south and the west.
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