IFMR Holdings raises $25m from Accion and others

Mumbai: Financial inclusion service provider IFMR Holdings Pvt Ltd. said on Thursday it has raised $25 million in equity from Accion International, LeapFrog Investments and impact investment fund Lok Capital.

Accion is investing $12.5 million of the total, LeapFrog Investments $9 million and Lok Capital $3.5 million.

IFMR Holdings is a subsidiary of IFMR Trust that was set up in 2013 and is looking to use the freshly raised funds for financial inclusion operations in India.

“This comes at an important inflection point for IFMR Holdings. Against the backdrop of a very favourable policy environment for financial inclusion, we are accelerating growth across all our businesses. We intend being at the forefront of business models combining scale and high-quality financial services for many millions of Indians,” said Bindu Ananth, chair of IFMR Trust.

Eighty six percent of Indians do not borrow from a formal source; only one out of every two Indians has a savings account, and insurance penetration is barely 4%, according to estimates by the company.

“They are tackling some of the most important issues facing India today by reaching millions of financially excluded households and enterprises, especially in extremely rural areas not served by the banking system. As a result, more people are able to create and grow businesses, insure themselves and their families, and build better live,” said Michael Schlein president with Accion.

The company provides access to finance through well-functioning markets for low-income households. It provides its services through micro-loans, small business finance, rural finance for commercial vehicles, and rural channels that provide credit, insurance and pensions.