Mumbai-headquartered cash-flow based lender to MSMEs and part of the NBFC Aavishkaar Group, Ashv Finance on Wednesday announced it has raised $10 million funding from Encourage Capital. The lender said it expects additional participation in the round. Ashv provides collateral-free and flexible financing to MSMEs and has assets under management (AUM) of Rs 1,000 crore through its presence in more than 180 locations across 15 states in India.
“Encourage Capital is excited to partner with Ashv Finance on its mission to support emerging India with a robust and resilient tech-led / data-driven lending model targeting an important segment of the underserved MSME market. We are also encouraged by Ashv’s determination in launching rooftop solar financing as its first climate finance product for its customers,” said Tarun Arora, Partner, Encourage Capital.
Encourage Capital LLC (previously known as Wolfensohn Fund Management) is an impact investment and advisory firm which has been investing in India for over 15 years with an emphasis on the financial sector. The firm has invested in Ashv Finance through Encourage Solar Finance L.P.
Ashv said the funds will be deployed to enhance its presence across the country and launch an “important new initiative” to finance rooftop solar for micro and small businesses.
Speaking on the fundraise, Nikesh Kumar Sinha, MD, Ashv Finance said the investment marks its foray into rooftop solar finance which the company has been contemplating for a while to commence verticalization of businesses within Ashv into socially relevant sectors.
The lender said it is looking to disburse Rs 390 crore loan to micro and small enterprises in the roof top solar space in the next five years and scale its AUM to Rs 1,800-2,000 crore.
The fundraise is in line with the focus of MSME lenders to back businesses leveraging solar energy to meet their sustainability target which in turn contributes to India’s overall energy goals.
For instance, in September this year, Tata Power Solar Systems, a wholly owned subsidiary of Tata Power Renewable Energy Limited (TREPL) had partnered with SIDBI to provide loans to MSMEs looking to install rooftop Solar PV plants from Tata Power or its authorised channel partners.
In May this year, private lender Yes Bank had launched its lending programme YES KIRAN for MSME manufacturers seeking to install solar panels at their premises.
In October, addressing the 6th assembly of International Solar Alliance (ISA), power minister R.K. Singh had said that solar energy has the edge among other renewable energy options and is much more reliable. He said that regulatory structures in terms of generation and transmission of power is required to spur the sector’s growth, FE had reported.