The loan will support microfinance and MSME lending to underserved communities, with a focus on women and rural households.
FMO, the Dutch entrepreneurial development bank, has committed USD 30 million (in INR equivalent) to Annapurna Finance Private Limited (“AFPL”), one of India’s leading non-banking financial companies focused on microfinance. The loan, structured as a senior secured listed non-convertible debenture (NCD), aims to enhance access to finance for low-income households and micro-entrepreneurs, while promoting green lending initiatives such as electric vehicles, rooftop solar, and water and sanitation solutions.
Founded in 2009 and headquartered in Bhubaneswar, AFPL has grown into a top 10 microfinance institution in India, serving 2.9 million clients across 21 states through 1,708[SA1] branches. With 98% of its borrowers being women and 86% living in rural areas, AFPL plays a critical role in advancing financial inclusion and rural resilience. The company also maintains a strong focus on agriculture and allied activities, which accounts to around 60% of its portfolio, and has strategically diversified into MSME lending since 2018.
The proceeds from FMO’s loan will be used for on-lending to micro-borrowers in rural areas, supporting income-generating activities and poverty reduction, green qualifying loans, including electric vehicles, rooftop solar installations, and water and sanitation projects.
This transaction aligns with FMO’s commitment to promote inclusive finance and climate action. It qualifies for a 100% Reducing Inequalities (RI) label and a 3% Green label, contributing to key Sustainable Development Goals (SDGs), notably SDG 8 (Decent Work and Economic Growth) and SDG 10 (Reduced Inequalities).
Peter Byrde, Director Private Equity at FMO, said: “Annapurna Finance combines a strong social mission with robust financial performance and governance. By providing long-term local currency funding, we aim to strengthen AFPL’s ability to serve underserved communities and expand its green lending portfolio. This loan reflects our commitment to inclusive growth and climate resilience in India.”
Despite recent sectoral headwinds, AFPL has demonstrated resilience, maintaining profitability and asset quality through prudent risk management and digital innovation. With a capital adequacy ratio of 29.3% and a diversified funding base, the company is well-positioned for sustainable growth, and this loan shows our confidence in the sector.
