The new capital will be used to boost MSME financing in the high-growth potential manufacturing segment in India.
Electronica Finance Limited (EFL), a provider of loans to MSMEs (micro, small, and medium enterprises), has secured Rs 400 crore in its Series B funding. The equity round was led by LeapFrog Investments, with participation from Aavishkaar Capital. Encourage Capital, a US-based impact asset manager, was the first institutional equity investor in EFL.
The funds secured will help strengthen the company’s balance sheet and provide the foundation for another phase of expansion. The new capital will be used to boost MSME financing in the high-growth potential manufacturing segment in India.
Founded in 1990, EFL offers products like machine loans, rooftop solar loans, and working capital loans, as well as microloans against property in semi-urban and rural India, with the aim of providing sustainable financial inclusion. The company has grown its assets under management (AUM) by more than three times over the past five years. AUM now stands at over Rs 40 lakh crore and is projected to increase with a compound annual growth rate (CAGR) of around 35 per cent over the next 3 years, reads a company statement.
Shilpa Pophale, Managing Director & CEO, Electronica Finance Limited, said, “With a strong track record and deep expertise in this segment, EFL remains committed to providing technology-based solutions and financial support to MSMEs that are powering India’s unprecedented economic growth. This association with two leading social impact investors can help us support small businesses to thrive and deliver resilient, low-carbon growth.”
Stewart Langdon, Partner, LeapFrog Investments, said, “The benefits of these loans go beyond the small business owner, catalysing job creation and supporting households and communities.”