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IFC to invest $75m in Mahindra Finance's MSME fund (Eds: Adding details, chaning investment numbe

rs) Mumbai, Dec 2 (PTI) World Bank Group arm IFC has anchored an investment round of USD 200 million in Mahindra Financial Services to create a dedicated pool of financing for the micro, small and medium enterprises in low-income states.

The IFC has invested USD75 million from its own account and is mobilising another USD 125 million as parallel loans, a statement said.

Mahindra Finance has further committed USD 225 million to this pool.

At least USD 100 million will be earmarked for women- owned MSMEs.

'Although the financing needs of rural and women-owned enterprises are not radically different, the level of financial exclusion is higher,' IFC's manager for financial institutions group for South Asia Hemalata Mahalingam said.

The dedicated gender line and focus on unreached segments will contribute to addressing these gaps and demonstrate the commercial viability of investing in women and low-income groups, she said.

Mahindra Finance vice-chairman and managing director Ramesh Iyer said, 'availability of credit for income generation, especially to women and low-income households, will further accelerate financial inclusion.' In 2018, the IFC had invested USD 100 million in the Mahindra group company to increase loans to farmers to buy tractors, commercial vehicles among others.

The IFC also invested an equivalent of USD 25 million in Mahindra Rural Housing Finance for housing loans to the rural poor.

An IFC study conducted in 2018 estimated the credit gap for MSMEs in the country at USD 397.5 billion, which is around 15 percent of GDP.

NBFCs are an important source of credit for the MSME sector which feeds crucial industrial value chains and employs 124 million people, including semi-skilled and unskilled workers.

MSMEs account for over 80 percent of industrial enterprises and over 45 percent of exports. The biggest constraint they face is access to finance. PTI HV BEN BEN