Vistaar Finance, a well-established institution for MSME lending in India, has recently publicized the receipt of $25 million in funding from the U.S. International Development Finance Corporation (DFC), as a component of a committed loan of US $50 million. This substantial investment is anticipated to fortify Vistaar Finance’s position as a leading provider of long-term loans for MSMEs in India.
Established in 2010, Vistaar Finance has played a pivotal role in shaping the MSME financing landscape in India, particularly when such lending options were restricted. The company’s commitment to catering to small businesses has facilitated over 250,000 MSMEs across 12 states in India to access the financial resources required to boost their productivity and expand their businesses.
With a workforce of over 2,500 employees and Assets Under Management (AUM) of approximately INR 4,154 crores as of March 2024, Vistaar Finance has established itself as a significant contributor to India’s “Make in India” initiative. Besides the recent funding from DFC, the company also obtained an initial equity infusion of ~$36 million from Warburg Pincus in 2023, showcasing solid support from global financial institutions.
Significantly, India is confronted with a substantial MSME financing gap of over $230 billion annually, with women-owned and led enterprises facing additional hurdles in accessing funding. DFC’s funding support is expected to facilitate Vistaar Finance’s endeavors to expand its secured MSME lending portfolio, with a specific focus on serving women-owned and led enterprises, as well as rural MSMEs.
The transaction was solely advised by Setuka Partners LLP, a specialized boutique advisory firm that focuses on enabling patient capital from international financial institutions for emerging and frontier market enterprises.
Avijit Saha, CEO of Vistaar Finance, conveyed appreciation for the support from DFC, underscoring the company’s dedication to empowering women’s entrepreneurship and broadening its outreach to underserved customers in rural markets.
Moreover, James Polan, Vice President of DFC’s Office of Health and Agribusiness, underscored the significance of DFC’s investment in Vistaar Finance, highlighting the impact it will have on expanding access to capital for small women-owned and led enterprises in rural India.
In conclusion, Vistaar Finance’s partnership with DFC signifies a significant milestone in the endeavor to address the financing needs of MSMEs in India, especially those spearheaded by women and operating in rural areas. As the company continues to extend its reach and influence, the collaboration with DFC is poised to play a pivotal role in nurturing inclusive economic growth in India.