Investing $100 million in Mahindra Finance, IFC intends to enable Mahindra Finance to further augment its growth and in turn extend mainly farming loan to individuals to buy tractors, vehicles and other equipment along with financing small and medium enterprises.
To be secured through nonconvertible debentures, this loan will assist Mahindra Finance which is already the country’s leading rural finance company, India’s largest tractor financier and finance institution that reaches more than half of India’s 600000 inhabited villages.
According to data, mechanized farming cuts costs by 25% while raising productivity by 20%. This helps the Indian Government’s target of doubling farmers’ income by 2022. Mechanizing is especially important as only 30 % of Indian farming currently uses modern equipment despite its benefits and 80 % of arms in India are classified as “small and marginal” and requires financing for smaller mechanization solutions.
According to Ramesh Iyer, Vice-Chairman & Managing Director, Mahindra Finance:
“Since its inception in 1991, Mahindra Finance has been working in the rural and semi-urban areas of India, catalyzing financial inclusion of the unbanked and under-served communities and also partnering with them in their difficult times. Our focus has been on enabling these customers with innovative financial solutions, tailor made to their evolving needs, fueling entrepreneurial aspirations, promoting self-reliance and transforming lives. We believe that we are uniquely positioned to serve and grow this segment because of our deep penetration and knowledge.”
Mahindra & Mahindra, Mahindra Finance’s parent company, has been IFC’s partner for several decades. In India, 60 % of the rural households depend upon agriculture.
Arun Kumar Sharma, Chief Investment Officer, IFC said the following:
“To make a significant impact in the agriculture sector, we need to provide patient capital and deliver climate-smart solutions. Mahindra Finance brings the scale and expertise, and we aim to develop agribusiness solutions focused on women.”
A sister organization of the World Bank, IFC is the largest global development institution focused on the private sector in emerging markets. IFC works with more than 2000 businesses worldwide and it delivered a record $19.3 billion in long-term financing for developing countries, leveraging the power of the private sector to help end poverty and boost shared prosperity.
About Mahindra & Mahindra Financial Services Limited
Mahindra & Mahindra Financial Services Limited (Mahindra Finance) is part of Mahindra Group is one of the leading non- banking finance companies. Mahindra finance has 1284 offices in India, has over 5.3 million customers and has an AUM of over $ 8.49 billion.
About THE MAHINDRA GROUP
A $19 billion federation of companies that enable people to rise through innovative mobility solutions, driving rural prosperity, enhancing urban living, nurturing new businesses and fostering communities, Mahindra group has had a leading role in utility vehicles, IT, financial services and vacation ownership in India and is also the world’s largest tractor company comparing by volume. Headquartered in India, Mahindra employs more than 200000 people across 100 different countries around the globe.