news - FMO invests in InCred and ftcash to increase access to financial services in India

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FMO invests in InCred and ftcash to increase access to financial services in India

May 3, 2019

Signing Ceremony at the Dutch Embassy in Mumbay

Dutch development bank FMO has invested USD35 million in InCred, a diversified Non-Banking Financing Company (“NBFC”) headquartered in Mumbai, India that provides SME business loans, education loans, two-wheeler loans, home loans and consumer loans. InCred leverages on latest technology and data science to increase access to finance and make financial services for its customers quick and easy. By providing formal credit to underbanked (M)SMEs, individuals and through on-lending to MFIs/NBCFs,

InCred supports inclusive economic growth. India has over 55 million MSMEs, which are leading contributors to the nation’s employment and GDP. The Company started lending in 2017, is rapidly growing and profitable since its first year of operations.

FMO’s equity investment is to support the increased outreach of the company, providing the capital buffer needed to grow InCred’s loan book. As part of regulatory compliances, InCred adopted the Fair Practices Code. The guidelines cover principles to disclose terms and conditions of loans, adopting noncoercive recovery methods, a grievance mechanism and privacy guidelines.

“FMO is pleased to work together with InCred to promote financial inclusion in India by improving much needed access to financial services for smaller business and individuals, said Jaap Reinking, Director Private Equity at FMO, “This will stimulate economic growth and job creation in the country.”

FMO also invested in ftcash, a fintech startup that provides merchant cash advances to micro merchants. A round of funding of USD7.2 million was raised that will be used to accelerate product development and expanding into new geographies.

ftcash focuses on improving access to credit for informal micro merchants that are largely underserved. ftcash uses a proprietary algorithm to analyze payments and alternative data for originating loans and deducts collections directly from merchants’ digital payments. Additionally, ftcash matches merchants’ digital cash flows to credit due dates, increasing the chances of on-time loan payments.

“The innovative proposition of ftcash is stimulating small and micro entrepreneurship development and financial inclusion in India. FMO is very pleased to support economic development globally by catalysing the establishment of more stable and inclusive financial systems in emerging and frontier markets,” said Ronald Janse, Manager Private Equity at FMO.

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