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IFC invests $10 million in Power2SME

Will also help firm expand beyond 14 states, ramp up tie-ups with banks, hike user base 10 fold

T E Narasimhan  |  Chennai 

IFC invests $10 million in Power2SME

IFC, a member of the Group, has invested$10 million as equity in Power2SME, an platform that helps small and medium buy raw materials at bulk prices and get working capital without collateral.

In addition to the investment, will also advise to help it expand beyond the 14 states it currently operates in, improve its ability to provide working capital to SMEs by adding more banks as partners, and increase the number of users on its platforms by up to 10 times in five years.

is backed by firms such as Kalaari Capital, Accel Partners, and joined it as a strategic advisor through his investment in late 2015.

"IFC's extensive experience in supporting the SME sector through financing and deep networks with banks and financial institutions will help us in our vision to make SMEs bankable," said R Narayan, Founder and CEO,

Micro, small and medium enterprises form a large part of the Indian economy, accounting for 45 per cent of the country's industrial output and 40 per cent of its exports. There are 48.8 million MSMEs in India, which employ 111 million people.

There is critical shortage of long-term funding for the sector. Some estimates put the gap at $320 billion against a total of demand of $500 billion. India has the largest base of SMEs in the world after China. However, Indian SMEs contribute only 8-10 percent to the GDP, compared to 60 percent in China, according to company's release.

"Our investment in will spur greater VC interest in the SME sector in the country and support India's vision to become a global manufacturing hub," said Ruchira Shukla, and Private Equity Lead, South Asia. "By working with SME-focused and partner financial institutions, we aim to improve access to finance for over one million SMEs in the next five years."

First Published: Tue, September 05 2017. 16:50 IST