Vistaar Finance, a prominent MSME lending institution in India, has received a substantial funding of US $25 million as part of a committed loan of US $50 million from the U.S. International Development Finance Corporation (DFC).
Established in 2010 during a time when MSME lending was uncommon in India, Vistaar has played a pivotal role in developing the MSME financing market by offering long-term loans to a segment that was previously underserved or reliant on informal high-cost borrowing. Over the years, Vistaar’s financing has empowered more than 250,000 MSMEs across 12 states in India, aiding them in enhancing their productivity and income levels.
The company’s clear mission to support small businesses and contribute significantly to India’s “Make in India” initiative has led to its growth, with a workforce of over 2,500 employees and an Assets Under Management (AUM) of approximately INR 4,154 crores as of March 2024. Additionally, Vistaar received a primary equity infusion of around $36 million from Warburg Pincus, a renowned global private equity firm focused on growth, in mid-2023.
India faces a significant MSME financing gap of over $230 billion annually, representing 11% of the country’s GDP, with women-owned and -led enterprises encountering notable challenges in accessing financial resources. DFC’s support is expected to aid Vistaar in expanding its secured MSME lending portfolio in India, with a specific focus on serving women-owned and led enterprises as well as rural MSMEs.
Setuka Partners LLP, a boutique advisory firm specializing in mobilizing patient capital from international financial institutions for enterprises in emerging and frontier markets, acted as the exclusive advisor for this transaction.
Avijit Saha, CEO of Vistaar Finance, expressed gratitude for DFC’s support, highlighting its timely nature and its alignment with Vistaar’s objectives of empowering women-led entrepreneurship, strengthening rural market presence, and reaching more underserved customers.
James Polan, Vice President of DFC’s Office of Health and Agribusiness, emphasized DFC’s commitment to investing $50 million in Vistaar Finance to improve access to capital for small women-owned and led enterprises in rural India, addressing the challenges they face in securing financing.
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