SAVE Solutions is a business correspondent for State Bank of India, Bank of India and Bank of Baroda and intends to use this capital to expand its direct lending through subsidiaries SAVE Microfinance and SAVE Financial Services, group chief financial officer Gourav Sirohi told ET.
SAVE, which started its journey from Gaya in 2009, may use part of the funds to strengthen IT infrastructure.
Unitus Capital advised SAVE Solutions on the deal while Khaitan & Co advised the overseas firm.
Maj is the second equity investor in SAVE, which received its first overseas funding from Belgium’s Incofin Investment management in 2017. Incofin holds 17% in the financial inclusion firm.
Maj Invest manages $12 billion in assets, of which about $1 billion are in private equity commitments. Its financial inclusion funds invest directly in micro lenders across Asia, Latin America and Africa.
SAVE Microfinance, with a Rs 100 crore loan portfolio, and SAVE Financial Services, which lends to micro-enterprises against property as collateral, has Rs 40 crore in assets. The two subsidiaries have helped the group build diversified assets to spread credit risks. The group has 12 million clients in the rural areas.
“We aim to take the total portfolio to Rs 4,000-4,500 crore in the next four years,” Sirohi said. “The fresh capital may be sufficient for the next two-and-a-half years.”
This is the third significant overseas investment in India’s financial inclusion space in as many months. In May, Norway’s Nordic Microfinance Initiative and Japan’s Gojo & Company invested in India’s microfinance space, which has Rs 2.32 lakh crore of outstanding loans.
NBFC-MFIs received 33% higher debt funding at Rs 42,150 crore in FY20 while their cumulative equity grew by 33% to Rs 16,140 crore, according Microfinance Institutions Network, the self-regulator for NBFC-MFIs.