IFMR Capital, the Chennai-based non-banking finance company (NBFC), will be focussing on agricultural finance, a new asset class.
There are 8-10 NBFCs specialised in agricultural finance in India and the company will work with these NBFCs connecting the financially excluded class of clients in getting their funds, according to Kshama Fernandes, CEO, IFMR Capital.
In an interaction with The Hindu, Ms. Kshama said the company was working closely with clients in providing most optimal debt solution to them at every stage of their growth. “We act not only as a structurer and arranger for our clients, but also as an investor and liquidity provider, thereby linking our own success to that of our clients,” she said. IFMR capital, for its part, would also invest 10 per cent of the fund requirement of clients, she said.
The other focus area for IFMR Capital was affordable housing finance, an interesting asset class with funding requirement ranging from Rs.5 lakh to Rs.15 lakh, mainly targeting consumers in villages.
She said IFMR Capital was working with 75 NBFCs, which were involved in providing capital to MSMEs and also extending small business loans finance (micro credit). These NBFCs were also offering other asset products such as vehicle loans including two-wheeler loans, to informal, self-employed segment. “Clients belonging to this segment do not have formal income documentation such as income tax returns and these NBFCs have developed and perfected a model for lending, based on enterprise income and cash flow assessment through personal discussions with them, backed by local knowledge and standard business templates,” Ms. Kshma Fernandes said.
Besides, IFMR Capital was working with some recently set up NBFCs by experienced professionals with exclusive focus on MSMEs lending to specific sectors such as education and textiles.
The company since inception in the last seven years, has arranged access to debt capital worth Rs.15,000 crore. In the last two years alone, it has concluded deals for more than Rs.7,000 crore.
Recently the company completed its collateralised bond obligation (CBO) for Rs.98 crore, comprising multi-issuer pooled non-convertible debentures. This type of bond issuance had happened for the time in India, Ms. Kshma Fernandes claimed.
The CBO issuers numbering 11, included microfinance companies and small business lenders whose end customers were either self-employed individuals from the financially excluded segment or the ones employed in informal sectors. The CBO transaction, facilitated by IFMR Capital, was one of the best efforts by the company in developing scalable structures for meeting the requirements of its clients and investors, and worked as an efficient route for accessing debt capital, she said.
Promoted by IFMR Trust, IFMR Capital works towards the creation of a stable and inclusive financial system in India. It works with high quality originators so that they may deepen their presence and provide access to financial services to million of under-served households.
