US-based Creation Investments Capital Management has provided $12 million (Rs 90 crore) in debt capital to three non-bank financial companies (NBFCs) in India. These investments are from the first tranche of a $100 million India-focused debt fund launched by Creation earlier this year.
The firm has invested in NBFCs namely Berar Finance, Sindhuja Microcredit and Shri Ram Finance Corporation (SRFC). By investing in the three firms, the private equity firm is providing credit to microfinance and medium- and small- enterprise borrowers in low-income regions in India such as Vidarbha (Maharashtra), Odisha, Jharkhand, Bihar, Chhattisgarh, Uttar Pradesh. For all three companies, Creation’s investment is their first foreign portfolio investment (FPI) debt financing.
Creation Investments expects to deploy the next tranche of funds in the second quarter of 2021 and complete its commitments by March 2022.
Working in partnership with CredAvenue, a subsidiary of Vivriti Capital, Creation’s investment aims to help people and businesses in India with little access to financial services. Using the technology of CredAvenue non-bank finance companies that meet lending criteria are selected.
“Our work focuses on financial inclusion for those at the bottom of the economic pyramid,” said Remika Agarwal, head of Creation Investments’ India office. “Working with CredAvenue, we can further leverageVivriti’s scale, speed and efficiency to ramp up our investment program.”
“Creation has made a significant contribution in boosting investor confidence in India’s financial sector, and it is gratifying to play a critical role in supporting financial inclusion goals,” said Bandaru Ramadasu, vice president of products and structured finance for CredAvenue.
The India-focused debt fund is exclusively on providing debt financing to non-bank financial companies serving the Indian population in areas such as microlending, affordable housing, vehicle loans, small- and medium-enterprise lending (SMEs), and education finance.
Creation invested in Vivriti Capital in 2018 from its private equity funds.