TPG Growth leads $144m round for China microlender

CFPA Microfinance was founded by the China Foundation for Poverty Alleviation in 1996 and offers microfinance services for production and consumption to poverty-stricken populations in rural areas. Additional investors in the MFI include Ant Financial – the financial services affiliate of Alibaba Group – Sequoia Capital China, and the International Finance Corporation (IFC).

The company claims to have more than 380,000 customers in 91,000 villages across China, with over 3,000 staff to source and review loans nationwide. With nearly 500 million people in rural communities estimated to be underserved by the traditional banking system, CFPA Microfinance sees considerable potential for growth.

TPG Growth is investing via Rise Fund, a social and environmental impact investment vehicle that closed in 2017 with $2.1 billion in commitments. This is the fund’s second investment in China, following a $1.9 billion commitment to the financial services unit of search giant Baidu earlier this year alongside TPG Capital’s Asia fund and several other investors.

“We see a strong collinearity between commercial success and impact in CFPA Microfinance, which is fully in line with the Rise Fund’s investment strategy,” said Chang Sun, a managing partner for TPG in China, in a statement. “Given that the vast majority of CFPA Microfinance’s customers come from China’s poorest communities, the impact of these micro loans can be transformative.”

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• Topics
• Greater China
• Financials
• Expansion
• China
• TPG Capital
• Financial Services
• Growth capital
• Impact investment