China’s CFPA Microfinance raises $140m in Series C led by The Rise Fund

A customer counts Chinese Yuan notes at a market in Beijing, August 12, 2015. REUTERS/Jason Lee

CFPA Microfinance Management, one of China’s largest microfinance players, announced that it has secured nearly Rmb1 billion ($140 million) in commitment for its Series C equity financing led by The Rise Fund, a global impact investing fund managed by TPG Growth.

The latest funding round adds The Rise Fund to CFPA’s list of big-ticket investors, which now include Ant Financial, China Foundation for Poverty Alleviation, IFC, Sequoia Capital China, High Impact Capital Advisors, and Renda Puhui.

Founded by the China Foundation for Poverty Alleviation in 1996, CFPA offers microfinance services to poverty-stricken populations in rural areas for productions and consumption.

The company said its microlending currently reaches more than 380,000 customers in 91,000 villages across China, with 22-per cent year-over-year growth in net revenues and more than 3,000 on-the-ground staff sourcing and reviewing loans.

“The investment of this round is aimed to continue to support the company with technology innovation, operation upgrade and coverage expansion to bring inclusive financial to broader population with diversified and enhanced service offering to rural market,” CFPA Microfinance said.

China is home to one of the largest unbanked populations in the world. Nearly 500 million people across rural China are served by neither traditional banking systems nor non-bank institutions.

But microfinance started late in the country, compared to India, but it grew rapidly. By 2012, the country had 6,000 microcredit providers, with just a quarter having been in operation for more than three years.

“The initial intention of CFPA Microfinance was to resolve the problem of obtaining loans for middle and low-income people in rural areas. We are committed to ‘break through the last 100 meters of rural finance,” said CFPA Microfinance president Dongwen Liu.

The Rise Fund, the lead investor in this round, is one of the world’s largest global fund committed to achieving measurable, positive social and environmental outcomes alongside competitive financial returns. It is managed by TPG Growth, the global growth equity and middle market buyout platform of alternative asset firm TPG.

The investment in CFPA Microfinance is part of TPG’s global effort to expand financial inclusion, and it will be the Rise Fund’s second investment in China. It also builds on The Rise Fund’s existing investment in Baidu Financial Services Group, which offers low-cost education loans to consumers across China.

“As one of the few profitable national micro-finance platforms focus on rural populations, we see a strong collinearity between commercial success and impact in CFPA Microfinance, which is fully in line with the Rise Fund’s investment strategy”, said TPG China managing partner Chang Sun.

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

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  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.