The private equity fund Maj Invest Financial Inclusion Fund III completed its fourth investment by acquiring primary shares in Epimoney Pvt. Ltd (FlexiLoans). Established in 2016, FlexiLoans (FL) is a Non-Bank Finance Company (NBFC) that offers unsecured loans to the underserved MSMEs (Micro, small and medium enterprises) through a tech enabled digital business model. It is headquartered in Mumbai, Maharashtra (in the western part of India), with digital operations spread across the country.
The company’s MSME clients are anchored by various digital ecosystems including online marketplaces (such as amazon.in) and other Indian digital platforms. FL integrates with such ecosystems to generate leads on MSME borrowers and also to underwrite their cashflow/big data on a real time basis to offer credit-related products. FlexiLoans operates fully digitally i.e., client acquisition, credit analysis, disbursements and collections are done completely online (no physical branches).
There is a huge addressable market in India with MSME credit gap estimated to be nearly USD 270 billion. Indian MSMEs currently contribute to around 30% of the country’s GDP with the potential to reach over 60%. Moreover, the target segment is largely unaddressed by formal credit sources and nearly 92% is underbanked or underserved. FlexiLoans targets 15m digitally active MSMEs which account for 25% of the total 63m Indian MSME market. Such digital MSMEs have an unmet borrowing need of USD 50bn.
FlexiLoans’ fully digital business model allows it to scale rapidly while also maintaining lower operating expenses. The company’s risk pricing models based on proprietary algorithms have also enabled it to maintain its credit cost. The company will use the proceeds of this fund raise to support its portfolio growth and enhance its digital initiatives.
In addition to providing capital for the company to grow, Maj invest will also contribute to the improvement of corporate governance of the company, formalizing ESG standards and practices, and be a strategic advisor on the board.
Also see articles in the media:
The Economic Times, India: Digital lending platform FlexiLoans raises USD 90m
BusinessToday, India: MSME fintech lending firm FlexiLoans raises USD 90m in latest funding
For more information, please contact:
Kasper Svarrer, Managing Partner, Financial Inclusion, Maj Invest
Mobile: +45 33 38 73 60
Mail: ksv@majinvest.com