What We Do

IFMR Capital connects high quality originators impacting financially excluded households and businesses, such as, micro finance, affordable housing finance, small business finance, agricultural finance and vehicle finance, with investors in existing and emerging debt capital markets.

IFMR Capital has identified a set of formal institutions – largely NBFCs – that have been involved in providing growth capital to MSMEs in India. These NBFCs are typically companies that have wide experience in credit analysis of vintage of 5-10 years and have other asset products (such as two-wheeler loans, commercial vehicle loans etc.) that are also provided to the informal, self-employed segment (i.e., where formal income documentation such as income tax returns are not available). These NBFCs have, over the years, developed and perfected a model for lending based on enterprise income and cashflow assessment through personal discussions with the entrepreneur, backed by local knowledge and standard business templates.

In addition to NBFCs of the above type, there are also other NBFCs that have been set up recently by experienced professionals and with equity support from mainstream equity investors, that focus exclusively on SME lending, focusing on specific sectors such as education, textiles etc. IFMR Capital is also working with such institutions to understand and evaluate their origination model.

Apart from directly making debt investments in select SME lending institutions, IFMR Capital also works to connect high quality SME loan Originators to capital market investors. Just as in the micro finance space, the core of IFMR Capital’s work in this sector is its underwriting guidelines for SME loan origination and the structuring expertise, that helps IFMR Capital in co-investing with the capital market investors in all transactions.

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