Vistaar Finance raises $50m in Debt Financing from DFC

By Gloria Mathias

Vistaar Finance, India’s MSME lending institution, has received $25m in funding out of a committed loan of $50 million from the U.S. government’s development finance institution, the U.S. International Development Finance Corporation (DFC).

The company’s clear vision is to serve small businesses and be one of the important catalysts in India’s drive towards “Make in India.” This loan from DFC comes on top of a primary equity infusion that closed in mid-2023, amounting to $36 million from Warburg Pincus, a global private equity firm focused on growth.

Vistaar was founded in 2010 when MSME lending was not common in India. The company has developed MSME financing and provided long-term loans for this segment, which has traditionally been unserved or has had to contend with informal, high-cost borrowing. Since its inception, Vistaar’s financing has enabled over 2,50,000+ MSMEs across 12 states in India to enhance their productive capacity and, hence, their incomes.

India has an MSME financing gap of over $230 billion, or 11% of GDP annually, with women-owned and women-led enterprises facing disproportionate barriers to accessing finance. DFC’s support is expected to assist Vistaar in expanding its secured MSME lending portfolio in India, with an emphasis on serving women-owned and led enterprises and rural MSMEs.

Setuka Partners LLP, a boutique advisory firm focused on catalysing patient capital from international financial institutions for emerging and frontier market enterprises, was the exclusive advisor to this transaction.

Avijit Saha, CEO of Vistaar Finance, said, “We are extremely thankful to the US International Development Finance Corporation (DFC) for this facility, which comes to us at the right time and helps us in our goal of strengthening women’ s-led entrepreneurship, further deepening our presence in rural markets, and reaching out to more unserved and underserved customers.”

“DFC’s $50 million investment in Vistaar Finance will expand access to capital for lending to small women-owned and women-led enterprises in rural India facing barriers to financing,” said James Polan, Vice President of DFC’s Office of Health and Agribusiness. “DFC is proud to work alongside partners like Vistaar Finance to support increased access to financing for innovative enterprises in India.”