Murugappa group, CDC Group Pie to address credit issue of MSME
New Delhi, Jan 13 (KNN) Cholamandalam Investment and Finance Company (CIFCL) of Murugappa group and CDC Group Pie (CDC) the United Kingdom’s development finance institution have joined hands to address credit issue of Micro Small and Medium Enterprises (MSMEs).
Cholamandalam Investment and Finance Company (CIFCL), has raised Rs 4 billion (Rs 400 crore) from CDC Group Pie (CDC), the United Kingdom’s development finance institution and impact investor through the issuance of unsecured, subordinated, rupee denominated masala bonds.
This is CIFCL’s maiden masala bond issue which may be listed on London Stock Exchange or any other international stock exchanges in future.
“CDC and CIFCL have joined hands to address the business credit requirements of small and medium road transport operators and MSME customers. CDC’s investment in CIFCL’s masala bonds will support the extension of loans to driver-turned-owners and micro and small enterprises in underserved rural and semi-urban areas of India. We look forward to working with CDC in promoting the economic and social well-being of our customers,” said Arun Alagappan, MD of CIFCL.
Incorporated in 1978, CIFCL offers vehicle finance, business and home loans. It has more than 1,000 branches across India, with a diversified loan portfolio spanning 1.2 million customers. CIFCL caters to small and medium road transport operators for new and used commercial vehicles with over 50% of the portfolio in low income states.
The majority of CIFCL’s customer segment is self-employed borrowers or entrepreneurs and small manufacturers, with nearly one-third of the portfolio constituting first-time borrowers, thereby facilitating access to the formal capital market and promoting financial inclusion.
Speaking on the same Srini Nagarajan, CDC managing director and head of Asia, said, “CDC’s commitment to CIFCL demonstrates our value as a development financial institution with long-term patient capital. Our investment will enable CIFL to extend loans to small vehicle owners and facilitate the availability of credit to rural and semi-urban markets and support the company with subordinated debt in this tight liquidity environment. CDC has been investing in India for over 30 years and we look forward to the start of a productive long-term relationship with CIFCL and the wider Murugappa group.”