IFC to invest $35m in Indian NBFC Manappuram Finance

Photo: Reuters

IFC, a sister organisation of the World Bank, will invest $35 million in Manappuram Finance Limited (MFL) to help low-income households and small enterprises avail loans against their gold assets, Manappuram said in a statement on Tuesday.

This is IFC’s first investment in a gold-loan non-banking financial company (NBFC) in India. Gold loan companies offer loans to customers and small businesses by enabling them to monetize their gold without the need for documentary proof of income.

India has 23,000 tons of gold with an estimated market value of $1 trillion, Manappuram Finance said citing data from World Gold Council.

“However, the current market size of formal gold loans is a mere $19.6 billion, which leaves the field open to pawn-brokers and usurious money lenders in rural areas. The government of India encourages formal financial institutions to enter the market not only to bring large stocks of idle gold into the mainstream for productive use, but also to stem the rising indebtedness and exploitation,” the statement added.

According to Jun Zhang, IFC Country Head for India, IFC is making its first investment in a gold-loan finance company to create opportunities for the rural and poor households to transition from informal to formal credit.

This three-year, senior, secured loan from IFC to MFL is an endorsement of the critical role gold-loan NBFCs play in bringing first-time customers into the formal economy, the statement said, adding that IFC may also provide advisory services to bring global best practices to MFL’s risk management systems and help it build capacity in MSME lending.

This article was first published on livemint.com

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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.