Actis has invested $220 million in Profectus Capital, an Indian non-banking financial company platform. The platform will focus on providing lending to Indian small and medium-sized businesses.
London, Mumbai: Wednesday 30 May, 2018: Actis, a leading global growth markets investor, today announced that it is building an Indian Non-Banking Financial Company focused on secured lending to Small and Medium Enterprises (“SMEs”) with a plan to fund the platform with up to US$220 million of equity capital over a 5-year period.
India has a deep culture of small family businesses with over 30 million SMEs and the sector is experiencing secular growth in demand for credit. Profectus Capital will exclusively focus on lending to SME businesses operating in a dozen targeted subsectors.
Actis is backing a team led by the highly reputed ex-CEO of Reliance Commercial Finance (“RCF”), KV Srinivasan (“KV”) who built one of the market leading SME lending franchises over a period of nearly a decade.
Actis has developed unparalleled expertise in financial services sectors with investments in Banks, NBFCs, Payments and Wealth Management businesses across growth markets. In India, Actis has played a significant role in building successful lending institutions before. It was a 26% shareholder in UTI Bank (now Axis Bank) and a founding investor in IDFC. This commitment to Profectus Capital follows Actis’ recent investment in India’s largest digital retail payments platform Pine Labs.
Asanka Rodrigo, Partner and Head of South Asia at Actis, said: “We are looking to build a high quality, professional and successful institution focused on the core of the fast growing Indian economy, its SME sector. We are really privileged to work with KV and his team who have a stellar track record building a high quality business in the sector”.
KV Srinivasan, CEO of Profectus, said: “The potential for providing finance for small businesses in India is immense if you understand your customers- how they think, how they operate and what their needs and aspirations are. At Profectus we have the right skills and expertise in understanding SMEs and providing not just the appropriate means of finance, but also be a partner in their progress. Actis has an impressive track record in the financial services space and is a long term player- the perfect partner for us to grow the business.”
Pratik Jain, a Director at Actis, said: “SMEs are a vital cog in the Indian economy and have a huge unmet demand for capital. We believe that NBFC’s are best placed to serve this demand in the most efficient manner. We sought out an experienced management team and had a meeting of minds with KV who shared our vision and values”
Actis is a leading investor in growth markets, delivering consistent competitive returns, responsibly. It has a growing portfolio of investments across Asia, Africa and Latin America and has raised over US$13bn since inception.
The firm invests through insights gained from trusted relationships and local knowledge, deep sector expertise and an unparalleled heritage, set within a culture of active ownership.
Applying developed market disciplines to growth markets, an established team of c. 100 investment professionals in ten countries identify investment opportunities in response to two trends: rising domestic consumption and the need for sustained investment in infrastructure across private equity, energy and real estate asset classes.
Actis is a signatory to the United Nations backed Principles for Responsible Investment (UNPRI), an investor initiative developed by the UNEP FI and the UN Global Compact. Actis targets consistent superior returns across asset classes over the long-term, bringing financial and social benefits to investors, consumers and communities. It calls this the positive power of capital.