Saarathi Finance raises ₹475 cr to boost MSME lending in rural India

TVS Capital, Lok Capital and others back newly licensed NBFC to expand credit access for underserved MSMEs in semi-urban and rural India, valuing firm at ₹900 crore

Saarathi Finance, a newly licensed non-banking financial company (NBFC) focused on India’s micro, small and medium enterprises (MSMEs), has raised ₹475 crore in its inaugural funding round. The capital will be used to expand credit access for underserved MSMEs, particularly in semi-urban and rural areas across Tamil Nadu, Telangana, Andhra Pradesh, Karnataka, Rajasthan and Uttar Pradesh.

 

The Series A round, which values the company at over ₹900 crore, was led by TVS Capital Funds, Lok Capital, Evolvence Equity Partners, Paragon Partners and a group of angel investors who collectively contributed about ₹350 crore. The remaining capital was infused by founder and chief executive officer Vivek Bansal and co-founder Sunil Daga. Saarathi aims to bridge the persistent credit gap in India’s MSME sector, aligning with broader goals of financial inclusion and rural economic development.

 

 

‘We are committed to empowering Bharat’s entrepreneurs by providing more than just credit—a partnership that values and supports their growth,’ said Vivek Bansal, founder and CEO, Saarathi Finance. 

 

Gopal Srinivasan, chairman and managing director, TVS Capital Funds, said Saarathi Finance embodies the spirit of inclusive growth that aligns with his firm’s vision of supporting micro and nano businesses crucial to India’s journey towards a $10-trillion economy.

 

‘We are excited to partner with Saarathi as the next generation of market leaders in this space,’ said Rajat Bansal, managing director, Lok Capital.

 

Abhishek Chandra, partner, Evolvence Equity Partners, said his firm believes in Saarathi’s mission to bridge the large credit gap for underbanked MSMEs in India.

 

Siddharth Parekh, senior partner and co-founder, Paragon Partners, said that with Vivek Bansal’s proven leadership at InCred and Sunil Daga’s deep experience in secured lending at Kotak Bank, Saarathi has built a high-calibre team poised to drive financial inclusion. 

 

Saarathi’s approach combines technology-driven solutions with personalised customer engagement, offering both secured and unsecured loans tailored to the needs of MSMEs. The firm’s emphasis on flexible income assessment and rapid loan processing aims to improve credit access for entrepreneurs traditionally overlooked by formal financial institutions.