Bhubaneshwar-based micro finance lender Annapurna Finance has raised $15 million from Proparco, private-sector financing arm of French Development Agency (AFD), in a Series A2 funding round.
This is the fourth capital raise by Annapurna in the last 15 months, taking the total capital infusion to $100 million.
In March 2021, the company had raised $30 million from Nuveen Global Impact Fund followed by a $20 million funding from DEG in November, and $35 million from Encourage Capital, Accion and its existing investor Oikocredit in December.
The company said it will utilise the funds to grow its loan book, invest in technology, expand geographically, and further its vision of enabling financial inclusion at scale, it said in a statement.
Founded in 2009 by Gobinda Chandra Pattanaik and Dibyajyoti Pattanaik, Annapurna is a RBI registered Non Banking Financial Company-Micro Finance Institution (NBFC-MFI) that offers micro-credit loans, home improvement, and MSME loans to individuals and small businesses. It has developed a pan India rural distribution network across 20 states, and claims to have over Rs 6,500 crore Assets Under Management (AUM).
The MFI is also backed by Asian Development Bank (ADB), SIDBI Venture Capital, Oman India Joint Investment Fund, Belgian Investment Company (BIO), DCB Bank, Women’s World banking, and Bamboo Capital Partners.
“The fundraise will help the company in strengthening its tech stack to bring in more efficient, automated and paperless financial products to the unbanked and underbanked,” it added.
Gobinda Chandra Pattanaik, Managing Director, Annapurna Finance, said, “We are thrilled to have our existing debt partner Proparco further support us and now partner with us on the equity side. Their belief in our ability to enable financial inclusion across the country and empower women has fortified our commitment to building one of India’s largest financial services companies.”
A microfinance loan is defined as a collateral-free loan given to a household having an annual income of up to Rs 3 lakh. In March 2022, the RBI had released its final guidelines for MFIs, where it removed caps on the pricing of small loans given by NBFC-MFIs, bringing them to the same level as other such lenders, including banks.
The central bank had also raised the annual household income level to Rs 3 lakh for classification of eligibility to avail of microfinance loans, thus increasing the market size. Earlier, the income caps were kept at Rs 0.25 lakh in rural areas and Rs 2 lakh in other areas. The guidelines had come as a breather to NBFC-MFIs as the minimum requirement of total loan assets, for qualifying for an NBFC-MFI licence, was reduced to 75 percent from 85 percent earlier.
“It gives us immense pleasure to back the founders, who have meticulously, thoughtfully, and consistently built Annapurna, with a strong yet nimble business model that has focused on making financial services and products available to financially excluded people especially women in rural areas of India,” said Diane Jegam, Regional Director, South Asia, Proparco.
Bengaluru-based Unitus Capital acted as the financial transaction advisor to Annapurna.
