IFC's investment in Religare Enterprises will help the financial services company bolster its financial inclusion services, says Religare's CEO Shachindra Nath. Positioning the partnership as strategic and IFC as a partner in development, Nath said the company will further collaborate with IFC on various new businesses, including housing finance, rural banking and other areas. "Having IFC as an investor at a parent level will help us leverage their learning in building products that are aligned to rural banking, affordable housing financing and so on for low income products. IFC has invested in other emerging markets in financial intermediaries and we will be able to pick and choose the best practises for each of our businesses. There have been cases around the world where people have done inclusive banking and made profits," Nath said in an interaction with VCCircle.
IFC recently invested $ 75 million in Indian financial conglomerate Religare Enterprises through compulsory convertible debentures, which will give it eight per cent equity stake upon conversion. This is IFC's single largest investment in the financial services sector in south Asia.
Leveraging IFC's expertise in all areas of developmental finance alongside government's focus on financial inclusion, Religare is geared to play a big role in India's rural and semi-urban markets.
"If you have to build a large financial services business, you need to align yourself with the policy focus and what is the broad mandate of the people of India. The mandate from the government has been very clear that if you want to grow in this market place, you have to grow inclusively. This partnership will help us refine our process, refine our products, to grow more inclusively. We will now do it as part of our focus," he added.
IFC is also nominating a member on the board of Religare, whose various subsidiaries are present in businesses including life and health insurance, brokerage, asset management, investment banking and SME finance. The group is already present in all segments of financial services except banking and general insurance. Watch the video for more.