French public entity Agence Française de Développement Group’s private sector financing arm, Proparco, which had earlier backed a host of microfinance institutions including Annapurna Finance, Northern Arc, JK Paper and Sonata Finance, among others, has now invested in another Indian microlender to further push for women entrepreneurship.
Proparco has infused debt capital of $15 million (around Rs 122.7 crore) in Mumbai-based Svatantra Microfin Pvt Ltd, a firm promoted by Ananya Birla, the daughter of Aditya Birla Group chairman Kumar Mangalam Birla.
Svatantra provides micro loans to rural women entrepreneurs who run small businesses.
Till date, the microfinance institution has AUM (assets under management) of $1 billion. It claims to have grown at a CAGR (compound annual growth rate) of 120% between 2015 and 2022, serving over 3 million rural customers across 19 states.
In 2019, Svatantra had acquired a 100% stake in Micro Housing Finance Corporation (MHFC) for nearly Rs 300 crore to diversify into the affordable housing segment. The home loan provider, Svatantra MHFC, caters to EWS/LIG segment and operates via a completely branchless model.
Proparco provides funding and support to both businesses and financial institutions in markets such as Africa, Asia, Latin America and the Middle East. It focuses on development sectors such as infrastructure, renewable energies, agribusiness, financial institutions, health and education.
“This is the beginning of a long-term relationship to further the cause of gender equity and women empowerment,” Birla said.
“Svatantra Microfin’s strategy of achieving responsible financial inclusion of financially excluded populations in rural areas of India with the help of technology, contributes to Sustainable Development Goals achievement and is fully aligned with Proparco’s strategy in the region,” said Francoise Lombard, chief executive officer of Proparco.
Over the past several years, Proparco has invested in a few microfinance institutions. For instance, it had invested in IndusInd Bank’s microfinance division, IFMR Holdings, Prabhat Dairy, Jain Irrigation Systems, NSL Renewable Power, Educomp Solutions and Avaada Energy.
Proparco is also a limited partner (LP) in two funds of Lok Capital, Rabo Equity Advisors’ India Agri Business Fund II and a fund managed by Aavishkaar Venture Management.
