The private equity fund Maj Invest Financial Inclusion Fund III completed its third investment in Finova Capital Pvt. Ltd (Finova). Established in 2016, the company is a regulated Non-Bank Finance Company (NBFC) in India, focused on reducing the country’s credit gap for the segment of small enterprises by financing small enterprises with 10–20 employees engaged in income-generating activities. It is headquartered in Jaipur, Rajasthan (in the north-western part of India), with operations expanding to the northern and central states of the country.
The company provides fully secured loans with an average ticket size around USD 5,500. In India, there is a huge addressable market with the credit gap to small enterprises estimated at over USD 200 billion. Small Indian enterprises currently contribute to around 30% of the country’s GDP with the potential to reach over 60%. The target segment is unaddressed by formal credit sources and nearly 92% is underbanked or underserved, creating a tremendous opportunity for financial institutions like Finova to fill the gap.
Finova has a secured lending business model and tight underwriting standards that leverage technology in the credit assessment and loan management process. Owing to its resilient business model, strong governance and management capacity, the company showed strong performance during the COVID pandemic and continues to demonstrate significant growth potential for the road ahead.
In addition to providing capital for the company to grow, Maj invest will contribute to the improvement of corporate governance of the company, formalizing ESG standards and best practices, and be a strategic advisor along with other reputed international shareholders on the board.
Also see articles in the media:
The Economic Times, India: Financial services firm Finova Capital receives funding from Maj Invest, Norwest, and others
Your Story, India: Finova Capital raises USD 65m led by Maj Invest, Norwest Venture Partners
For more information, please contact:
Kasper Svarrer, Managing Partner, Financial Inclusion, Maj Invest
Mobile: +45 33 38 73 60
Mail: ksv@majinvest.com