Micro-lender Fusion Microfinance on Tuesday said it has raised Rs 500 crore from global private equity major Warburg Pincus and impact investor Creation Investments.
The lender, incorporated in 2010, is looking to expand its distribution footprint beyond the present 18 states and invest in technological tools, it said in a statement.
The New Delhi-headquartered company uses joint liability group (JLG) model, developed by Grameen Bank in Bangladesh, to give loans of up to Rs 50,000.
Fusion Founder and Chief Executive Devesh Sachdev said the company is targeting to "maintain a steady and sustainable pace at a much larger scale in the next 3-5 years".
Speaking about the funding, Devesh added,
“We are honoured by the trust that our investors have laid on us. The follow-up investment by Warburg Pincus and Creation Investment reflects their faith in Fusion’s ability to harness rural India’s incredible growth story. Fusion over the last few years is committed to maintain a steady and sustainable pace, and take it to a much larger scale in the next 3-5 years. Building forth on a strong operating platform and strategic initiatives, we are well placed to become a valued company in the financial inclusion space.”
In December 2018, Warburg had invested Rs 520 crore in the company, which achieved a 45 percent growth in assets under management in 2018-19 financial year, and had a portfolio of Rs 3,350 crore as of December 2019, as stated by the firm. Warburg Managing Director Narendra Ostawal said,
"The follow-on investment by existing investors will help expand the capital base to support Fusion's growth plans. We continue to be impressed with the management team and look forward to supporting them in their endeavours.”
Fusion serves around two million clients through its strong team of more than 5,500 people in over 575 branches spread across 18 states of India as on December, 2019.
(Disclaimer: Additional background information has been added to this PTI copy for context)