Creation Investments Capital Management, a leading private capital investor in developing markets financial services, has provided $12 million in debt capital to three non-bank financial companies in India.
Working in partnership with CredAvenue, a subsidiary of Vivriti Capital, Creation’s investment aims to help people and businesses in India with little access to financial services, the company said.
These investments are from the first tranche of a $100 million India-focused debt fund launched by Creation earlier this year. The fund is focusing exclusively on providing debt financing to non-bank financial companies serving the Indian population in areas such as microlending, affordable housing, vehicle loans, small- and medium-enterprise lending (SMEs), and education finance.
Creation is partnering with CredAvenue, whose technology-led debt platform locates non-bank finance companies that meet lending criteria.
The platform also provides due diligence, deal execution, risk management and portfolio monitoring solutions. Vivriti Capital, CredAvenue’s parent, links institutions, investors, small enterprises and individuals that lack efficient access to financial services in India.
Creation, with offices in Chicago and Bengaluru, has invested in Berar Finance, Sindhuja Microcredit and Shri Ram Finance Corporation (SRFC), providing credit microfinance and medium- and small- enterprise borrowers in low-income regions in India such as Vidarbha (Maharashtra), Odisha, Jharkhand, Bihar, Chhattisgarh, Uttar Pradesh.
For all three companies, Creation’s investment is their first foreign portfolio investment (FPI) debt financing.
“Our work focuses on financial inclusion for those at the bottom of the economic pyramid,” said Creation Investments’ India office head Remika Agarwal.
“Creation has made a significant contribution in boosting investor confidence in India’s financial sector, and it is gratifying to play a critical role in supporting financial inclusion goals,” said CredAvenue vice president of products and structured finance Bandaru Ramadasu.
Creation Investments expects to deploy the next tranche of funds in the second quarter of 2021. Creation invested in Vivriti Capital in 2018 from its private equity funds.
Incorporated in 2017, CredAvenue has facilitated over Rs 55,000 crore of debt and has a network of over 150 Lenders and 800 FI, corporate borrowers. It has specialised sub platforms for pool transactions, loans, bonds, fulfilment, analytics and risk management solutions.