Chennai, May 28: International Finance Corporation (IFC) will invest $35 million in Manappuram Finance Limited (MFL), Kerala-based lender, to tap on households and small enterprises who are looking for loans against their gold assets. This is IFC’s first investment in a gold-loan NBFC in India.
“We are making our first investment in a gold-loan finance company to create opportunities for the rural and poor households in transition from informal to formal forms of credit,” said Jun Zhang, IFC Country Head for India.
Through this investment, IFC is supporting one of the priorities of the Indian government to unlock the value of idle gold and bring a large part of India’s unofficial savings into the formal financial system, he added.
This three-year, senior, secured loan from IFC to MFL is an endorsement of the critical role gold-loan NBFCs play in bringing first-time customers into the formal economy. IFC may also provide advisory services to bring global best practices to MFL’s risk management systems and help it build capacity in MSME lending.
V P Nandakumar, MD & CEO of Manappuram Finance Ltd. said, “We see this as an endorsement of our role as an agent of financial inclusion in India. Over the years, Manappuram Finance has led India’s quest to make formal credit accessible to the poor and the unbanked. IFC’s investment will help us deepen our reach in rural and semi-urban areas to offer people a viable alternative to informal credit.”