MICROCAPITAL BRIEF: Creation Investments Lends $12m to Berar Finance, SRFC, Sindhuja Microcredit of India

US-based Creation Investments Capital Management recently lent a total of USD 12 million to three non-bank financial institutions in India: Berar Finance, Shri Ram Finance Corporation (SRFC) and Sindhuja Microcredit. These investments are Creation’s first from a fund of USD 100 million that the firm launched in February 2021 to support institutions offering services such as microlending, moderate-income housing and vehicle loans in India.

Founded in 1990, Berar Finance specializes in vehicle financing, serving 300,000 customers through 95 branches across central and western India. As of 2020, the firm reported total assets of INR 5.5 billion (USD 76 million).

Incorporated in 2004, SRFC operates 105 branches and 70 collection points across the states of Chhattisgarh, Jharkhand, Madhya Pradesh and Odisha. Originally specializing in two-wheeler financing, the firm has since diversified to offer loans for a range of vehicle types; gold loans; micro-, small and medium-sized enterprise (MSME) finance; and microinsurance, all targeted at residents of rural areas.

Headquartered in the city of Delhi, Sindhuja Microcredit offers loans for MSMEs, and it plans to begin offering microinsurance and pensions in the near future. Sindhuja operates 70 branches across five states and reported INR 2.44 billion (USD 33.5 million) in assets under management in 2020.

In arranging the deals, Creation engaged the services of CredAvenue, a subsidiary of India’s Vivriti Capital that offers a platform for screening financial service providers as well as due diligence, deal execution, risk management and portfolio monitoring services. Since its inception in 2017, CredAvenue has facilitated transactions totaling INR 550 billion (USD 7.5 billion). As of March 2020, Vivriti Capital reported USD 108 million in total assets.

Founded in 2007, Creation manages impact and alternative investments, with a focus on private equity and private credit investment. As of December 2020, the firm managed USD 725 million in private funds and other vehicles on behalf of individuals, family offices and institutional investors. As of 2021, Creation’s portfolio companies had USD 15.7 billion in outstanding loans to micro- and small businesses. The firm reportedly plans to deploy the remainder of its new India-focused fund by March 2022.

By Sophie Fiala, Research Associate

Sources and Additional Resources

Times of India article
https://www.msn.com/en-in/money/topstories/creation-investments-invest-12-million-debt-capital-in-three-indian-companies/ar-BB1fzreW

Creation Investments homepage
https://creationinvestments.com/

Berar Finance homepage
https://berarfinance.com/

Berar Finance 2019-2020 annual report
https://berarfinance.com/pdf/agm/agm-20/BERAR-FINANCE-LIMITED-ANNUAL-REPORT-2019-20.pdf

Shri Ram Finance Corporation homepage
http://www.srfc.org.in/

Sindhuja Microcredit homepage
https://www.sindhujamicrocredit.com/

CredAvenue homepage
https://www.credavenue.com/

Vivriti Capital homepage
https://www.vivriticapital.com/

Vivriti Capital 2019-2020 report
https://www.vivriticapital.com/pdf/VCPL_Annual%20report_FY%2019-20.pdf

Previous MicroCapital article on Creation Investments
https://www.microcapital.org/microcapital-brief-creation-investments-launches-debt-fund-in-india-to-focus-on-microfinance-smes-housing-education/