Microtunneling further into India’s financial landscape, MSME-focused non-banking financial company (NBFC) Namdev Finvest has secured a fresh infusion of $19 million. The pre-Series C funding round, led by Maj Invest Financial Inclusion Fund III K/S, a private equity firm championing financial inclusion endeavors, will empower Namdev Finvest to extend its reach into underserved rural markets.
Fueling Financial Access in Remote Areas
This funding serves as a springboard for Namdev Finvest’s ambitious rural expansion plans. The company, currently operational across seven North-Western Indian states, is dedicated to providing much-needed financial solutions to populations in rural areas who often struggle with limited formal income and a lack of credit history.
Capitalizing on a Thriving Rural MSME Landscape
The timing of Namdev Finvest’s rural push aligns perfectly with a recent upsurge in MSME activity in these regions. According to the February 2024 TransUnion-CIBIL MSME Pulse report, a significant 46% of MSME loan originations originated from semi-urban and rural areas during the July-September 2023 quarter. This growth can be attributed, in part, to an improvement in MSME credit profiles. The same report highlights a reduction in the share of high-risk MSMEs from 15% to 13% year-on-year for the same period. Additionally, gross Non-Performing Assets (NPAs) in the MSME sector witnessed a decline of 14.3% to Rs 1.31 lakh crore for the financial year 2022-23, compared to Rs 1.54 lakh crore during FY22 (data shared by Bhanu Pratap Singh Verma, Minister of State in the MSME Ministry, in a written reply to a question in the Rajya Sabha last year). This positive trend indicates a maturing MSME sector in rural India, primed for further growth.
Building on a Strong Foundation in Financial Inclusion
Since its inception in 2013, Namdev Finvest has carved a niche for itself in the realm of financial inclusion. The company boasts an impressive track record, having disbursed over 50,000 loans specifically targeted at income generation activities. Namdev Finvest currently manages an Assets Under Management (AUM) exceeding Rs 1,120 crore, a testament to its successful approach.
Tech-Driven Innovation and Strategic Collaborations
Namdev Finvest’s recipe for success lies in its innovative blend of technology-driven underwriting processes and a cost-effective liability model. Furthermore, the company fosters strategic partnerships with over 44 lenders, encompassing a diverse range of institutions – public, private, small finance banks, international financial institutions, and domestic financial institutions. This collaborative approach strengthens Namdev Finvest’s position in the market.
Investor Confidence in Namdev Finvest’s Vision
Jitendra Tanwar, Managing Director & CEO of Namdev, expressed his delight at the secured funding, stating, “This significant investment reflects the unwavering confidence our investors have in Namdev’s mission of fostering financial inclusion across the country.”
Alignment with Maj Invest’s Values: Green Initiatives Applauded
Siva Vadivelazhagan, Director at Maj Invest Financial Inclusion, echoed the positive sentiment, highlighting his company’s enthusiasm for supporting Namdev Finvest. Vadivelazhagan specifically commended Namdev Finvest’s dedication to not only empowering small businesses but also promoting eco-friendly practices through their green finance initiatives.
This significant funding round for Namdev Finvest signifies a positive step forward for MSME financial inclusion in India. By expanding its reach into the often-neglected rural areas, Namdev Finvest has the potential to empower countless underserved communities and contribute significantly to the growth and prosperity of the MSME sector, a vital cog in the Indian economy.
Recent Blog : Walmart Vriddhi, D&B Team Up for MSME Credit, Contracts