Nordic Microfinance Initiative has recently completed a USD 4 million (INR 30 crore) equity investment in Light Microfinance, a non-banking finance company giving rural Indian women access to affordable loans for income-generating activities.
The investment is part of a USD 10 million (INR 75 crore) round of Series-A funding in cooperation with fellow investors Triple Jump and Incofin, and will be used towards growth and technology investments.
“The investment will boost our expansion plans in the states of Haryana, Rajasthan and Madhya Pradesh,” said Rakesh Kumar, CEO and co-founder of Light Microfinance. “We are also investing in multiple technology interventions like an AI-driven analytics platform and mobile applications to enhance sourcing, credit underwriting and collection capabilities through individualized mobile training modules and performance trackers.”
Despite the challenges of the pandemic, Light Microfinance reported an impressive portfolio growth of 30% in FY21. Light’s portfolio quality is amongst the best in the industry, with just 0.9% non-performing assets — less than one sixth compared to the industry average in India.
Commenting on the investment, Arthur Sletteberg, Managing Director of NMI, said: “We are excited to be continuing this journey of growth with Light Microfinance. Their approach and achievements so far in helping underserved rural women in India have consistently impressed us, especially given the turbulence of the pandemic. They have adapted quickly, leveraged technology in smart ways and kept their customers’ needs at the center.”
Light Microfinance started operations in 2009 and by March 2021 was catering to over 220,000 borrowers. A team of over 1400 people across 68 districts in Northwest India helps build financial inclusion for low-income households through the company’s robust technology platform.
Light’s customers — such as Sonalben, a vegetable vendor, pictured — are involved in a wide variety of income generating activities that range from agriculture, dairy, vegetable vending, floriculture and food processing to clothing, pottery and kite making.
Established in 2008 in Oslo, Norway, as a public-private partnership, NMI invests in and supports institutions providing financial inclusion to poor people in developing countries. Both positive social impact and sustainable financial returns are targeted, and investors include the Norwegian and Danish governmental funds for developing countries (Norfund and IFU) and private financial institutions including DNB Livsforsikring, Ferd, KLP, Lauritzen Fonden, PBU, Storebrand, TD Veen and Koldingvej 2, Billund A/S.
The Times of India: Light Microfinance gets $10mn funding from 3 EU investors
The Hindu: Light Microfinance secures $10-mn funding
Sonalben's story: contributing to the family income
Sonalben (pictured) is a client of Light Microfinance. Her husband is a factory worker and his income was not enough to run the household, so Sonalben decided to start her own business of vegetable vending and obtained a loan from Light Microfinance. She is now able to contribute to the family income and helps provide a better life for her children.
Source: Light Microfinance