MSME-focused non-banking financial company Ashv Finance, part of the impact investor Aavishkaar Group, has signed a co-lending agreement with the private sector lender HDFC Bank to provide unsecured business loans to micro and small enterprises (MSEs). The co-lending deal is part of Ashv Finance’s focus on growing co-lending partnerships for lending to MSMEs.
Nikesh Kumar Sinha, MD of Ashv Finance said the deal will help the company reach out to MSEs with better offerings. “This tie-up validates our data-led model to underwrite MSME businesses and is yet another bit of effort towards the country’s “Make in India” initiative, as it percolates more and more towards MSMEs in India.”
The unsecured business loans by Ashv Finance are offered between Rs 20 lakh and Rs 50 lakh for a minimum of 12 months and a maximum of 36 months. Ashv said repeat customers can avail of unsecured loans for up to Rs 75 lakh.
Loans are offered to MSMEs for investment in their infrastructure, meeting working capital needs, buying new plant and machinery, adopting new technology or paying for overhead costs including salaries, rent, office expenses etc.
MSMEs are required to be at least three years old with a turnover between Rs 3 crore and Rs 100 crore with GST & ITR returns for the previous three years.
“Through our partnership with Ashv Finance Ltd, we look to increase penetration, providing financial inclusion to last mile customers, which empowers individuals and businesses to fulfil their dreams,” said Raveesh Bhatia, Group Head – Emerging Corporates Group, HDFC Bank.
In December last year, Ashv Finance had announced $10 million in funding from Encourage Capital to launch a new initiative on financing rooftop solar for micro and small businesses. The company manages Rs 1,000 crore in assets under management and has a presence in 15 states in the country.
HDFC Bank in September last year had announced the co-lending arrangement with TruCap Finance for lending to MSMEs.
