Svakarma Finance, which lends mostly to small businesses, has raised $10.4 million (Rs 88 crore) through a combination of debt and equity, in a round led by the company’s existing institutional investors, including Encourage Capital.
Additionally, Svakarma Finance has signed a term sheet for up to $8 million in long-term borrowing from the US International Development Finance Corporation to promote financial inclusion of micro-enterprises in India.
The funding will be used by Svakarma to expand its branch presence and product suite, while growing its lending portfolio. The company plans to expand its presence to nearly 50 cities from 20 now and cater to over 30,000 micro-enterprises in the next three years.
Primarily, Svakarma Finance lends to underserved MSMEs, and has over 5,000 of such customers. Its current loan portfolio stands at around Rs 210 crore and the company is aiming to raise it to Rs 1,500 crore in the next three years.
In 2023, Encourage Capital had acquired a significant minority stake in the Mumbai-based lender, thereby marking its third investor in the fund.
