MSME lending platform Vistaar Finance raises $25 million from DFC

Vistaar Finance, an MSME lending firm, has received $25 million funding from the US International Development Finance Corporation (DFC), a US government development finance institution, according to a press release.

This is part of the larger committed loan of $50 million expected from the institution, the company said today, June 5.

The recent loan from DFC comes in line with a primary equity infusion, which closed in mid-2023, amounting to about $36 million from Warburg Pincus, a leading global private equity firm focused on growth.

As it stands, India is sitting on an MSME financing gap of over $230 billion, or 11 per cent of GDP annually, with women-owned and -led enterprises facing a disproportionate brunt in accessing funds. DFC’s support is expected to bridge this gap by assisting Vistaar in expanding its secured MSME lending portfolio in India with a special focus on serving women-owned and -led enterprises along with rural MSMEs.

"DFC's $50 million investment in Vistaar Finance will expand access to capital for lending to small women-owned and -led enterprises in rural India facing barriers to financing," said James Polan, vice-president of DFC’s Office of Health and Agribusiness.

Polan further said, "DFC is proud to work alongside partners like Vistaar Finance to support increased access to financing for innovative enterprises in India," Vistaar started its operations in April 2010 at a time when MSME lending was uncommon. It provides long-term loans to the segment that had been traditionally overlooked.

Commenting on the development, Avijit Saha, CEO of Vistaar Finance said, "We are extremely thankful to the US International Development Finance Corporation (DFC) for this facility, which comes to us at the right time and helps us in our goal of strengthening women's lead entrepreneurship, further deepening our presence in rural markets, and reaching out to more unserved and underserved customers."

The financial institution Vistaar claims that it has helped more than 2,50,000 MSMEs across 12 states in India since its inception. It has helped micro-enterprises to enhance their productive capacity leading to better incomes.

The company has over 2,500 employees with an asset under management (AUM) of Rs 4,154 crore and playing the role of an important catalyst in India’s push towards 'Make in India'.