Micro, small, and medium-sized business (MSMEs) loan provider Electronica Finance Limited (EFL) has raised Rs 400 crore in Series B investment. LeapFrog Investments led the equity round, while Aavishkaar Capital also participated. The first institutional equity investor in EFL was Encourage Capital, an impact asset manager located in the United States.
The money raised will support the company's next phase of growth and aid to fortify its financial sheet. The additional funds would be utilized to increase MSME finance in India's manufacturing sector, which has a significant potential for development.
EFL was established in 1990 and provides working capital, machine, and rooftop solar loans in addition to microloans secured by property in semi-urban and rural areas of India. Its mission is to promote sustainable financial inclusion. Over the last five years, the company's assets under management (AUM) have increased by more than three times. According to a business statement, AUM, which now exceeds Rs 40 lakh crore, is expected to expand at a compound annual growth rate (CAGR) of about 35% over the following three years.
"With a strong track record and deep expertise in this segment, EFL remains committed to providing technology-based solutions and financial support to MSMEs that are driving India's unprecedented economic growth," stated Shilpa Pophale, Managing Director & CEO of Electronica Finance Limited. "Our partnership with two of the top social impact investors will enable us to support small businesses in their efforts to expand sustainably and with minimal carbon emissions," she added.
"The benefits of these loans go beyond the small business owner, catalyzing job creation and supporting households and communities," stated Stewart Langdon, partner at LeapFrog Investments.
