Vistaar Finance gets $50m loan from US DFC to enhance MSME lending in India

Vistaar Financial Services Private Limited, a leader in MSME lending in India, has secured a loan commitment of up to $50 million from the U.S. International Development Finance Corporation (DFC). This funding is expected to assist Vistaar Financial Services in further expanding its secured MSME lending portfolio, with a particular emphasis on serving women-owned and led enterprises and rural MSMEs.

Founded in 2010, Vistaar Financial Services has been a frontrunner in MSME financing, catering to segments that have traditionally struggled with informal high-cost borrowing. With a vision to serve small businesses and contribute to India’s “Make in India” initiative, Vistaar’s efforts have reached over 200,000 MSMEs across India, achieving assets under management (AUM) of around INR 3,100 crores as of March 2023.

India’s MSME financing gap, estimated at over $230 billion annually, reflects a persistent challenge, especially for women entrepreneurs. DFC’s support aims to bridge this gap and foster growth within this vital economic sector.

Quotes and Reactions

Avijit Saha, CEO of Vistaar Financial Services, expressed gratitude to DFC, noting the commitment comes at the right time to strengthen women’s led entrepreneurship and deepen rural market presence.

The founders of Vistaar Financial Services, Brahmanand Hegde and Ramakrishna Nishtala, emphasized their vision of empowering small businesses without compromising on asset quality and profitability.

James Polan, Vice President of DFC’s Office of Development Credit, affirmed DFC’s pride in partnering with Vistaar Finance to support increased financing access in India.

Key Highlights:

Deal Amount: Vistaar Financial Services secures a loan commitment of up to U.S. $50 million from the U.S. International Development Finance Corporation (DFC).

Purpose of Loan: To expand secured MSME lending portfolio in India, with a focus on women-owned and led enterprises and rural MSMEs.

Recent Funding: This loan follows a recent primary equity infusion of ~$36 million from Warburg Pincus.

Impact on MSME Financing: Vistaar Financial Services has been a pioneer in MSME financing, enabling over 200,000 MSMEs across 12 states in India.

Advisor: Setuka Partners LLP acted as the exclusive advisor to the transaction.