Hyderabad-based corporate lender Caspian Debt on Friday announced that it has received an investment of $20 million from the U.S. International Development Finance Corporation (DFC) as long-term debt.
The new facility, which is a combination of subordinated and senior debt, will support Caspian Debt in providing customised, collateral free loans digitally to professionally managed enterprises operating in high impact sectors in India, including microfinance, SME finance, affordable housing, affordable healthcare, sustainable agribusiness and education, it said in a statement.
“We will use this funding to focus on promoting disruptive entrepreneurs, who are pushing the envelope for creating sustainable impact. This vote of trust from DFC is even more valuable at a time when the whole world, especially the small and medium companies, are dealing with the economic aftermath of a global pandemic,” said S. Viswanatha Prasad, founder and managing director of Caspian Debt.
Caspian Debt primarily works with first generation social entrepreneurs, who find it difficult to raise working capital as they run new-age businesses with an asset light model, and have no collateral to offer. The company claims to have lent over $219 million to over 140 early stage enterprises over the last seven years.
Caspian Debt said, it will also commit 33% of this debt facility to women-centric businesses and fulfilling its commitment to DFC’s 2X Women’s Initiative, which has catalysed over $2 billion of private sector investment in businesses and funds that empower women.
“Small businesses are the engine of growth and job creation in India, and high impact businesses are the vehicle for achieving a more responsible, sustainable and equitable economic future,” ” said Anthony Randazzo, CFA Investment Director on the Social Enterprise Finance Team at DFC.
He added that DFC approved first loan to Caspian Debt in 2014 when it was still an early stage venture. “This follow-on loan is an expression of confidence we place in the important work that Caspian Debt does and demonstrates our long-term commitment, particularly in these uncertain times.”