New Delhi: Arohan Financial Services, a microfinance institution part of the Aavishkar-Intellecap Group, has raised $24 million, nearly Rs200 crores from a development finance institution, Investment Fund for Developing Countries (IFU), which the Denmark government backs.
The move comes after the microlender scrapped its plans to float an initial public offering (IPO) due to tough macroeconomic conditions. Arohan counts private equity firm Tano Capital and secondary specialist TR Capital among its backers.
In March 2023, the Kolkata-based firm raised $11 million, nearly Rs 91 crore, from another offshore backer, the Dutch development bank FMO, before the latest IFU investment.
According to the reports, the company will use the capital to grow its business and greening its services. It will also use the funds to expand the footprint and increase the impact by reaching out to poor and vulnerable clients with no previous access to credit.
IFU has invested on behalf of the Danish SDG Investment Fund, which large Danish pension funds and private investors back. The fund, which has a corpus of around $700 million, is backed by six Danish pension funds, including PKA, Pension Denmark, PFA, ATP, P+ and PenSam.
Arohan has a client base of around two million customers in India, out of which over 98% are women. Its activities are spread across 15 states and 250 districts.
“Arohan is a leading microfinance institution in India that has had a focus on rural population, states with low financial inclusion, hence creating a strong impact. We believe that our investment can enable Arohan to further strengthen its impact by assisting even more people in India in augmenting their income and enhancing their lives,” said Deepa Hingorani, senior vice president of IFU.
“With Covid clearly behind us, we look forward to scaling the business over the next few years in this priority area for the country,” said Manoj Kumar Nambiar, managing director at Arohan.
