MSME-focused non-banking financial company (NBFC) Namdev Finvest has raised $19 million in its pre-series C funding round led by private equity player Maj Invest Financial Inclusion Fund III K/S, the company announced on Monday. Promoters group and employees also participated in the round.
“This round of funding will help us to extend our reach into newly expanded rural geographies,” said Jitendra Tanwar, Managing Director & CEO, Namdev.
Established in 2013 by Tanwar, Namdev is present in seven North-Western states, focusing on underserved population with low formal income and limited credit history in rural and semi-urban areas. The company’s portfolio includes tailored business loans for MSMEs and green finance options such as e-mobility and solar loans.
Operating through over 100 branches, Namdev said has disbursed over 50,000 loans ranging from Rs 4 lakh to Rs 7 lakh, primarily for income generation, accumulating an AUM (assets under management) exceeding Rs 1,120 crore.
“We’re eager to support their successful track record, leveraging tech-driven underwriting and a cost-effective liability model,” said Siva Vadivelazhagan, Director, Maj Invest Financial Inclusion.
Maj Invest is a Danish asset management company with about $12 billion under management, providing services in asset management and private equity.
Backed by investors such as Incofin India Progress Fund, Maj Invest, BII and LHC, Namdev has collaborations with over 44 lenders, including public, private, and small finance banks, international financial institutions, and domestic financial institutions.
Importantly, in the July-September 2023 quarter, 46 per cent of MSME originations were from semi-urban and rural regions of the country, according to the February 2024 TransUnion-CIBIL MSME Pulse report.
One of the key factors towards this expansion was the improvement in credit profiles of MSMEs. The share of high-risk MSMEs had reduced to 13 per cent during the quarter from 15 per cent during the same period in the previous year.
As of FY23, gross NPAs in the MSME sector had declined by 14.3 per cent to Rs 1.31 lakh crore for the financial year 2022-23 from Rs 1.54 lakh crore during FY22, according to the data shared by Bhanu Pratap Singh Verma, Minister of State in the MSME Ministry in a written reply to a question in the Rajya Sabha last year.