Global growth markets investor Actis is now building an Indian Non-Banking Financial Company focused on secured lending to SMEs with a plan to fund the platform with up to US$220M of equity capital over a 5-year period. Actis is backing a team led by ex CEO of Reliance Commercial Finance, KV Srinivasan.
“We are looking to build a high quality, professional and successful institution focused on the core of the fast growing Indian economy, its SME sector,” explained Actis Partner and Head of South Asia Asanka Rodrigo. “We are really privileged to work with KV and his team who have a stellar track record building a high quality business in the sector.”
Profectus Capital will exclusively focus on lending to SME businesses operating in a dozen targeted sub-sectors, tapping into India’s deep culture of small family businesses with over 30 million SMEs and the sector is experiencing secular growth in demand for credit.
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“The potential for providing finance for small businesses in India is immense if you understand your customers- how they think, how they operate and what their needs and aspirations are,” Profectus CEO KV Srinivasan. “At Profectus we have the right skills and expertise in understanding SMEs and providing not just the appropriate means of finance, but also be a partner in their progress. Actis has an impressive track record in the financial services space and is a long term player- the perfect partner for us to grow the business.”
Actis noted that it had developed expertise in financial services sectors with investments in Banks, NBFCs, Payments and Wealth Management businesses across growth markets. In India, Actis aims to play a significant role in building successful lending institutions; the company was a 26% shareholder in UTI Bank (now Axis Bank) and a founding investor in IDFC. This commitment to Profectus Capital follows Actis’ recent investment in March in India’s largest digital retail payments platform Pine Labs.
“SMEs are a vital cog in the Indian economy and have a huge unmet demand for capital. We believe that NBFC’s are best placed to serve this demand in the most efficient manner,” indicated Actis Director Pratik Jain. “We sought out an experienced management team and had a meeting of minds with KV who shared our vision and values.”
Actis has a growing portfolio of investments across Asia, Africa and Latin America and has raised over US$13B since inception.