Actis to launch $220m India NBFC

The NBFC, Profectus Capital, will focus on lending to Indian small and medium-sized enterprises (SMEs) across a range of sectors. KV Srinivasan, the former head of Indian small business lender Reliance Commercial Finance, will serve as CEO of the new company, according to a statement.

Actis’ investment is aimed at taking advantage of the more than 30 million SMEs estimated to be present in India, particularly small family businesses that have trouble obtaining credit from the heavily regulated traditional banking system. NBFCs are seen as a way both for businesses to obtain credit and for banks, which are NBFCs’ primary source of capital, to indirectly access these borrowers.

“The potential for providing finance for small businesses in India is immense if you understand your customers, how they think, how they operate and what their needs and aspirations are,” said Srinivasan. “At Profectus we have the right skills and expertise to understand SMEs and provide not just the appropriate means of finance, but also a partner in their progress.”

With the launch of Profectus, Actis joins several other PE firms that have founded their own NBFCs in India rather than investing in an existing institution. Last month, Lone Star Funds joined the RattanIndia Group to launch RattanIndia Finance, in which the partners will jointly invest INR26 billion ($400 million). Everstone Capital and pan-Asian special situations investor Clearwater Capital have each founded an NBFC, while KKR has two.

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• Topics
• South Asia
• Financials
• Credit
• India
• Actis Capital
• NBFCs
• Financial Services