US-based Creation Investments Capital Management has provided $ 12 million (Rs 90 crore) in debt capital to three non-bank financial corporations (NBFCs) in India. These investments come from the first tranche of a $ 100 million India-focused debt fund launched by Creation earlier this year.
The company has invested in NBFCs namely Berar Finance, Sindhuja Microcredit and Shri Ram Finance Corporation (SRFC). By investing in the three companies, the private equity firm provides credit to microfinance and medium and small business borrowers in low income regions of India such as Vidarbha (Maharashtra), Odisha, Jharkhand, Bihar, Chhattisgarh, Uttar Pradesh. For all three companies, Creation’s investment is their first foreign portfolio investment (REIT) debt financing.
Creation Investments plans 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 limited access to financial services. Using CredAvenue’s technology, non-bank finance companies that meet the lending criteria are selected.
“Our work focuses on financial inclusion for those at the bottom of the economic pyramid,” said Remika Agarwal, head of the India office of Creation Investments. “By working with CredAvenue, we can further leverage Vivriti’s scale, speed and efficiency to accelerate our investment program.”
“The creation has significantly contributed to building investor confidence in India’s financial sector, and it is gratifying to play a pivotal role in supporting financial inclusion goals,” said Bandaru Ramadasu, vice president of products. and structured financing from CredAvenue.
The India Focus Debt Fund is exclusively to provide debt financing to non-bank financial companies serving the Indian people in areas such as microcredit, affordable housing, auto loans, small business loans and medium-sized enterprises (SMEs) and education financing.
Création invested in Vivriti Capital in 2018 from its private equity funds.