To boost farm & MSME sector – IFC (World Bank Arm) invests USD$100 million in Mahindra Finance

NEW DELHI | MUMBAI | RAJKOT – IFC (International Finance Corporation), a member of the World Bank Group, has invested INR 6.4 billion (~USD$100 million ~ 640 crore Indian Rupees) in Mahindra & Mahindra Financial Services Ltd (Mahindra Finance), the company press release submitted to the Indian Bourses today said.

This investment will enable Mahindra Finance to further augment its growth, by extending loans to individuals, including farmers, to buy tractors, vehicles and other equipment, along with financing small and medium enterprises.

The investment in Mahindra Finance, one of the 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 nonconvertible debentures.

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 percent of India’s farmers use modern equipment.

To compound matters, 80 percent of farms in India are classified as “small and marginal”, and require financing for smaller mechanization solutions.

Ramesh Iyer, Vice-Chairman & Managing Director, Mahindra Finance, said.

“Since its inception in 1991, Mahindra Finance has been working in the rural and semi-urban areas of India, catalyzing financial inclusion of the unbanked and under-served communities and also partnering with them in their difficult times. Our focus has been on enabling these customers with innovative financial solutions, tailor made to their evolving needs, fueling entrepreneurial aspirations, promoting self-reliance and transforming lives. We believe that we are uniquely positioned to serve and grow this segment because of our deep penetration and knowledge.”

Mahindra Finance’s parent company, the vehicles-to-software conglomerate, Mahindra & Mahindra, has been IFC’s partner for several decades.

The new loan will help the company expand further and cater to the needs of small landholders.

Sixty percent of rural households depend on agriculture for their livelihood.

Yet, agricultural productivity has not increased and climate change holds a serious threat to the sector.

Arun Kumar Sharma, Chief Investment Officer, IFC, said,

“To make a significant impact in the agriculture sector, we need to provide patient capital and deliver climate-smart solutions. Mahindra Finance brings the scale and expertise, and we aim to develop agribusiness solutions focused on women.”

Agriculture plays a strong role in poverty reduction.

IFC invests across the agribusiness supply chain – from farm to retail – to help boost production, increase liquidity, improve logistics, and expand access to credit for small farmers.

IFC also runs large advisory programs aimed at developing farmers’ knowledge and adoption of modern agricultural practices to help them raise productivity, improve incomes, and learn new skills.

IFC is the world’s largest development finance institution focused on the private sector.

Since 1956, it has invested in over 400 companies in India, providing $17 billion in financing to the private sector.

World Bank arm investing into M&M Financial Services to boost farm and MSME sector of nation was very well received on the trading floors of the Indian Bourses, Investors & Traders continued their trade interest in the company shares resulting the opening of M&M Financial Services shares on positive counters in Green Zone, the company shares continued trading on positive note and ended in Green zone, when trading session on the Indian Bourses closed for the day.




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