Namdev Finvest’s $19M Funding Round Led by Maj Invest

MSME-focused non-banking financial company (NBFC) Namdev Finvest has secured a significant $19 million shot in the arm through a pre-Series C funding round. The round was spearheaded by private equity (PE) investor Maj Invest Financial Inclusion Fund III K/S, with participation from the company’s promoter group and employees. This fresh capital injection will empower Namdev Finvest to extend its reach and services to traditionally underserved rural areas across India.

Empowering the Underserved: Financial Solutions at the Grassroots

Established in 2013, Namdev Finvest has carved a distinct niche in providing financial solutions to micro, small and medium enterprises (MSMEs) operating in rural and semi-urban locations. Their primary target segment comprises individuals with low formal income and limited credit history – a sector often overlooked by traditional financial institutions. By bridging this gap, Namdev Finvest is playing a crucial role in promoting financial inclusion at the grassroots level.

Building a Strong Foundation: A Track Record of Success

Headquartered in Jaipur, Namdev Finvest has steadily expanded its footprint across seven North-Western states in India. The company boasts a robust portfolio exceeding INR 1,120 crore ($140 million) and has disbursed over 50,000 loans ranging from Rs 4 lakh to Rs 7 lakh. These loans are primarily focused on income generation activities, directly enabling growth and livelihood opportunities within the communities they serve.

A Thriving MSME Landscape: Poised for Continued Growth

India’s MSME sector is witnessing a positive trend, with a significant portion of loan originations shifting towards rural and semi-urban regions. According to the February 2024 TransUnion-CIBIL MSME Pulse report, 46% of MSME loan originations in the July-September 2023 quarter hailed from these areas. This expansion can be partly attributed to an improvement in credit profiles. The share of high-risk MSMEs has reduced from 15% to 13% during the same period compared to the previous year. Furthermore, Gross Non-Performing Assets (GNPAs) within the MSME sector have declined by 14.3% to Rs 1.31 lakh crore for the financial year 2022-23, compared to Rs 1.54 lakh crore in FY22 (data provided by Bhanu Pratap Singh Verma, Minister of State in the MSME Ministry). This indicates a borrower base that is increasingly creditworthy and poised for sustainable growth.

A Strategic Partnership for Accelerated Growth

Jitendra Tanwar, Managing Director & CEO of Namdev, expressed optimism about the funding’s role in propelling the company’s mission forward. “This significant investment reflects the confidence our investors have in Namdev’s mission of fostering financial inclusion,” he stated.

The investment aligns perfectly with the goals of Maj Invest Financial Inclusion Fund III K/S. Siva Vadivelazhagan, Director at the firm, highlighted their shared vision. “We are thrilled to be part of Namdev Finvest’s journey towards advancing financial inclusion,” he remarked. “Their dedication to serving small businesses and promoting green finance resonates strongly with our values.”

Looking Ahead: A Brighter Future for Rural MSMEs

With this fresh infusion of capital and a strategic partnership in place, Namdev Finvest is well-positioned to empower a significantly wider segment of India’s MSME sector, particularly in remote rural regions. Their focus on tech-driven underwriting, which streamlines loan approvals, and a cost-effective liability model is likely to further enhance their reach and impact. This strategic move not only strengthens Namdev Finvest’s position but also paves the way for a brighter future for countless rural MSMEs seeking financial inclusion and growth.

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