Multinational funding organisation British International Investment is looking to raise exposure to India's affordable housing finance and micro, small and medium enterprises (MSME) spaces, sectors that receive continuous government support and have shown significant improvements in asset quality metrics.
The UK's development finance institution said that it has a strong pipeline on both debt and equity investment in these two sectors and that it is looking for innovative ideas for funding.
BII's outstanding investment in India's financial services sector stands at $740 million, while the total exposure to India is around $2 billion.
BII makes equity investments, where it picks up direct shareholding in companies, debt investments and investments through its partner funds. Out of $740 million, $420 million is its equity investment, $230 crore is debt investment and the balance is from partner funds.
On the affordable housing side, BII has debt exposure to Aavas Financiers and equity investment in Shubham Housing Development Finance Company.A third area where BII focuses under the financial services space is microfinance. But it looks to invest in companies which offer bigger micro loans to individual borrowers, instead of providing loans to members of joint liability groups.
BII in its previous avatar as CDC supported the early days of several microfinance companies, some of which have graduated to small finance banks and got listed in the passage of time. At present, BII is the largest shareholder in Utkarsh Small Finance Bank and has significant investment in Light Microfinance.
