International Finance Corporation to invest $30M in Sachin Bansal’s NAVI for 4.5pc stake

The proposed investment by IFC is of the tune of Rs 2,100 million (or approx. $30 million) in Navi for a 4.5 percent equity stake in the company.

International Finance Corporation, which is a part of the World Bank Group, is looking to make an equity investment in Sachin Bansal-owned Navi Technologies (or NAVI).

According to the disclosure, the proposed investment by IFC is of the tune of Rs 2,100 million (or approx. $30 million) in Navi for a 4.5 percent equity stake in the company. 

This comes just months after Sachin Bansal picked up a majority stake in Chaitanya Rural Intermediation Development Services (CRIDS) last September, pumping in Rs 739 crore in the non-banking financial company (NBFC).

CRIDS is a wholly-owned subsidiary of Chaitanya India Fin Credit Private Limited (CIFCPL). IFC’s investment in NAVI will facilitate the transformation of CIFCPL into a technology-led universal bank or NAVI Bank (the Project), which would provide mass market banking solutions for individuals and micro, small and medium enterprises (MSME), and select corporates

Speaking on the move, Sachin Bansal, CEO of Navi, said,

“Building a universal bank is a reflection of our commitment to provide financial services to those who need them most. Our vision is to go beyond what hitherto has been broadly defined as ‘financial inclusion’ and provide access to formal financial services using technology that people can use intuitively and easily.”

Sachin assumed the role of CEO of CRIDS after his investment. But, the recent IFC disclosure states that NAVI is in the process of acquiring ownership of the company from Sachin Bansal. 

“NAVI is in the process of acquiring 100 percent ownership over the shares of CRIDS from Sachin Bansal and existing investors; and an application has been submitted to the Reserve Bank of India (RBI),” the disclosure statement on IFC’s website read.

CRIDS and CIFCPL are collectively referred to as Chaitanya, which presently provides loans to low-income customers in rural areas largely on the joint-liability-group lending (JLG) model, the statement added.  

In addition to this, CIFCPL is also in the process of applying for a Universal Bank License with the RBI

“CIFCPL has made an application to the RBI for a universal banking license under the RBI’s On-Tap Banking License Guidelines, 2016,” it said.   

NAVI, in a statement, said that the underlying vision of this license application is to increase financialisation by making banking simple, accessible and affordable via a consumer-centric and technology-driven approach.

It aims to bridge the credit gap for retail and MSME sector by developing industry leading technology and global best practices as a mainstay.

Ankit Agarwal, CFO of Navi, added that the objective is to go beyond basic services.

(Edited by Saheli Sen Gupta)