New Delhi, India, July 03, 2018: IFC,
a member of the World Bank Group, has invested INR 6.4 billion ($100 million)
in Mahindra & Mahindra Financial Services Ltd. This investment will
enable Mahindra Finance to augment its growth by extending loans to individuals,
including farmers, to buy tractors, vehicles and other equipment, along
with financing small and medium enterprises.
The investment in Mahindra Finance, the country’s leading rural finance
company and India’s largest tractor financier that reaches more than half
of India’s 600,000 inhabited villages, will be through secured non-convertible
Mechanized farming can cut costs by 25% and raise productivity by 20%.
That will help meet the Government’s target of doubling farmers’ incomes
by 2022. At present, less than 30 percent of India’s farmers use modern
equipment. To compound matters, 80 percent of farms in India are classified
as “small and marginal”, and require financing for smaller mechanization
“Since its inception in 1991, Mahindra Finance has been working in the
rural and semi-urban areas of India, catalyzing financial inclusion of
the unbanked and under-served communities and also partnering with them
in their difficult times. Our focus has been on enabling these customers
with innovative financial solutions, tailor made to their evolving needs”
said Ramesh Iyer, Vice-Chairman & Managing Director, Mahindra Finance.
Mahindra Finance’s parent company, the vehicles-to-software conglomerate,
Mahindra & Mahindra, has been IFC’s partner for several decades. The
new loan will help the company expand further and cater to the needs of
small landholders. Sixty percent of rural households depend on agriculture
for their livelihood. Yet, agricultural productivity has not increased
and climate change holds a serious threat to the sector.
“To make a significant impact in the agriculture sector, we need to provide
patient capital and deliver climate-smart solutions. Mahindra Finance brings
the scale and expertise, and we aim to develop agribusiness solutions focused
on women,” said Arun Kumar Sharma, Chief Investment Officer, IFC.
Agriculture plays a strong role in poverty reduction. IFC invests across
the agribusiness supply chain – from farm to retail – to help boost production,
increase liquidity, improve logistics, and expand access to credit for
small farmers. IFC also runs large advisory programs aimed at developing
farmers’ knowledge and adoption of modern agricultural practices to help
them raise productivity, improve incomes, and learn new skills.
IFC is the world’s largest development finance institution focused on
the private sector. Since 1956, it has invested in over 400 companies in
India, providing $17 billion in financing to the private sector.
IFC—a sister organization of the World Bank and member of the World Bank
Group—is the largest global development institution focused on the private
sector in emerging markets. We work with more than 2,000 businesses worldwide,
using our capital, expertise, and influence to create markets and opportunities
in the toughest areas of the world. In FY17, we delivered a record $19.3
billion in long-term financing for developing countries, leveraging the
power of the private sector to help end poverty and boost shared prosperity.
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