IFC proposes $100m investment in India's MMFSL

IFC’s investment will be used to finance the purchase of agricultural equipment, including tractors and other utility vehicles, and commercial vehicles, according to a filing. The development finance institution (DFI) expects its support for the NBFC to contribute to the economic empowerment of rural and semi-urban households through increased access to financing, while helping to expand agricultural mechanization and improve farm productivity.

MMFSL is a subsidiary of Mahindra & Mahindra, India’s largest tractor and utility vehicle manufacturer, which holds a 51.2% stake in the NBFC. The company has almost 1,200 branches across India and has provided financing to 4.7 million customers as of March 2017, with $6 billion in assets under management.

According to its most recent financial results, MMFSL saw INR72 billion ($1.1 billion) in revenue for the year ended March 2017, up from INR59 billion the year before. Over the same period net profit dropped from INR6.7 billion to INR5.3 billion.

IFC has supported a number of Indian NBFCs and microfinance institutions. Several of its investees have received in-principle approval for a small finance bank (SFB) license from the Reserve Bank of India, which would allow them to perform basic banking services such as acceptance of deposits and lending. Examples include Equitas Holdings and Au Financiers, which was the first institution to receive a final SFB license after cutting its foreign holding to 49% in 2016.

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• Topics
• South Asia
• Financials
• Expansion
• PIPEs
• India
• IFC
• NBFCs
• Financial Services