International Finance Corporation (IFC), a World Bank Group member, has invested Rs 640 crore (USD 100 million) in Mahindra & Mahindra Financial Services (MMFSL).
“The investment in Mahindra Finance, the country’s leading rural finance company and India’s largest tractor financier that reaches more than half of India’s 600,000 inhabited villages, will be through secured non-convertible debentures,” the statement said.
The company will use the funds to augment its growth by extending loans to individuals, including farmers, to buy tractors, vehicles and other equipment, along with financing small and medium enterprises, MMFSL said in a release today.
Mahindra Finance is the country’s largest non-banking financial company (NBFC) operating in rural and semi-urban India. With 16,000 employees and 1,000+ offices in 25 states, they have more than 3 million customers, offering them a suite of financial products ranging from asset financing, fixed deposits, mutual funds, SME financing, rural housing finance, and life and non-life insurance broking services.
“Mechanized farming can cut costs by 25% and raise productivity by 20%. That will help meet the government’s target of doubling farmers’ incomes by 2022. At present, less than 30% of India’s farmers use modern equipment. To compound matters, 80% of farms in India are classified as “small and marginal”, and require financing for smaller mechanization solutions,” IFC said in the statement.
Parent Mahindra & Mahindra Ltd has been IFC’s partner for several decades.