Our mission to “ensure that every individual and every enterprise has complete access to financial services” took a significant step forward with an equity investment of US$ 25 million in IFMR Holdings by Accion, a financial inclusion pioneer, LeapFrog Investments, a specialist investor in emerging-market financial services, and Lok Capital, an Indian impact investment firm. IFMR Trust is the promoter and remains the majority shareholder of the company.
The investment allows IFMR Holdings to accelerate its efforts to ensure financial access to the remotest corners of the country. Towards this IFMR Holdings already serves millions of financially excluded households and enterprises through three businesses: IFMR Capital – a debt capital markets platform for 75 originators offering micro-loans, small business finance, affordable housing and commercial vehicles finance, and reaching over 15 million financially excluded people; IFMR Rural Finance – a technology licensor that developed the Kshetriya Gramin Financial Services (KGFS) model for remote rural markets; and IFMR Rural Channels – a credit, insurance and pensions provider to over 600,000 clients through 242 branches in rural areas.
In a country where 86% of Indians do not borrow from a formal source, only one out of every two Indians has a savings account, and insurance penetration is barely 4%, the task ahead is vastly challenging and one which, IFMR Holdings and its partners, are ideally placed to overcome.
Commenting on the transaction, Bindu Ananth, Chair of IFMR Trust, the promoters of IFMR Holdings, said, “This comes at an important inflection point for IFMR Holdings. Against the backdrop of a very favourable policy environment for financial inclusion, we are accelerating growth across all our businesses. We intend being at the forefront of business models combining scale and high-quality financial services for many millions of Indians.”
IFMR Holdings CEO, Sucharita Mukherjee said, “Our belief is that access to finance, supported by well-functioning markets, is critically important for low-income households. This exciting partnership with like-minded investors such as Accion, LeapFrog and Lok brings the benefit of international best practice and a wide range of global insights to this work in India.”
To read the press release click here.