Microfinance lender startup Annapurna Finance raises $15M from Proparco
- ByStartupStory | June 25, 2022
Proparco, the private-sector financing arm of the French Development Agency (AFD), has contributed $15 million to the Series A2 funding round of Bhubaneshwar-based microlender Annapurna Finance. In the past 15 months, Annapurna has raised financing four times, bringing its total financial inflow to $100 million.
The company raised $30 million from Nuveen Global Impact Fund in March 2021. This was followed by the fundraising of $20 million from DEG in November and funding of $35 million from Encourage Capital, Accion, and its current backer Oikocredit in December. The company stated in a statement that it will use the cash to advance its objective of enabling financial inclusion at scale as well as to expand regionally, invest in technology, and develop its loan book.
Annapurna is an RBI-registered Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI) that provides micro-credit loans, home improvement loans, and MSME loans to individuals and small businesses. It was founded in 2009 by Gobinda Chandra Pattanaik and Dibyajyoti Pattanaik. It claims to have over Rs 6,500 crore in assets under management and has built a rural distribution network throughout 20 states of India (AUM).
“We are happy to have our existing lending partner Proparco continue to support us and now partner with us on the equity side. Our dedication to creating one of India’s greatest financial services organisations has been strengthened by their faith in our potential to achieve financial inclusion throughout the nation and empower women,” said Gobinda Chandra Pattanaik, managing director of Annapurna Finance.
A collateral-free loan with a maximum yearly income of Rs 3 lakh is referred to as a microfinance loan. The RBI published its final guidelines for MFIs in March 2022, and as a result, limitations on the pricing of small loans provided by NBFC-MFIs were abolished, bringing them up to par with other such lenders, including banks. The yearly household income threshold for eligibility to apply for microloans was also lifted by the central bank to Rs 3 lakh, expanding the market. The income ceilings were previously set at Rs. 0.25 lakh for rural areas and Rs. 2 lakh for all other locations. The rules provided NBFC-MFIs with some relief because the minimum amount of total loan assets needed to be granted an NBFC-MFI licence was lowered from 85 per cent to 75 per cent.
According to Diane Jegam, Regional Director, South Asia, Proparco, “It gives us immense pleasure to back the founders who have meticulously, thoughtfully, and consistently built Annapurna with a strong yet nimble business model that has focused on making financial services and products available to financially excluded people, especially women in rural areas of India.”
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