Shriram Transport Finance is getting an investment of $200 million from IFC, a member of the World Bank Group. The investment will be used to fund purchases of commercial vehicles and support MSMEs, the company said. The deal uses a unique securitization structure to mitigate foreign exchange risks and attract patient capital from pension funds, insurance firms, and foreign institutional investors. Half of the total amount will come from IFC’s own account and the rest mobilized from like-minded partners. The first tranche of $82 million was disbursed, the company said in a statement. It added that the funds will be used for lending to small road transport operators and MSMEs in rural and semi-urban areas in low-income states. According to Hemalata Mahalingam, manager, Financial Institutions Group, IFC South Asia, the unique securitization structure will channel patient capital from diverse financial sources into the NBFC segment and support the development of India’s debt capital markets. Umesh Revankar, MD and CEO, Shriram Transport Finance said NBFCs plays crucial role in last mile connectivity and financial inclusion. The funds raised will be used to help the small commercial vehicle operators and MSMEs in rural and semi urban markets.
