International Finance Corporation (IFC), a member of the World Bank Group, on Monday invested $200 million in Mahindra & Mahindra Financial Services, in a bid to create a dedicated pool of financing for micro, small and medium enterprises (MSMEs) in low-income states. Mahindra Finance has further committed $225 million to this pool, said a release.
The investment includes $75 million from IFC’s own account, while $125 million would be mobilised as parallel loans. At least $100 million will be set aside for women-owned MSMEs using blended finance from the IFC-Goldman Sachs’ Women Entrepreneurs Opportunity Facility.
“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.
Although the financing needs of rural and women-owned enterprises are not radically different, the level of financial exclusion is higher, and the dedicated gender line and focus will contribute to addressing these gaps and demonstrate the commercial viability of investing in women and low-income groups, she added.
IFC had previously joined hands with Mahindra Finance in 2018, when it invested an equivalent of $100 million in Mahindra Finance to increase loans to farmers to buy tractors, commercial vehicles, and other equipment for modern farming. IFC also invested an equivalent of $25 million in Mahindra Rural Housing Finance (MRHFL) for housing loans to the rural poor, the statement said.
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Source: Financial Express