Actis, a global growth markets investor, it is building an Indian Non-Banking Financial Company focused on secured lending to Small and Medium Enterprises (“SMEs”) with a plan to fund the platform with up to US$220m of equity capital over a 5-year period.
India has a deep culture of small family businesses with over 30 million SMEs and the sector is experiencing secular growth in demand for credit. Profectus Capital will exclusively focus on lending to SME businesses operating in a dozen targeted subsectors.
Actis is backing a team led by the highly reputed ex CEO of Reliance Commercial Finance (“RCF”), KV Srinivasan (“KV”) who built one of the market leading SME lending franchises over a period of nearly a decade.
Actis has developed unparalleled expertise in financial services sectors with investments in Banks, NBFCs, Payments and Wealth Management businesses across growth markets. In India, Actis has played a significant role in building successful lending institutions before. It 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 India’s largest digital retail payments platform Pine Labs.
Asanka Rodrigo, Partner and Head of South Asia at Actis, said: “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. 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”.
KV Srinivasan, CEO of Profectus, said: “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. 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.”
Pratik Jain, a Director at Actis, said: “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. We sought out an experienced management team and had a meeting of minds with KV who shared our vision and values”