Incofin India Progress Fund, a private equity fund focused on promoting growth equity capital for entrepreneurs, has invested $4.3 million (Rs 35 crore) in Varashakti Housing Finance (VHF). VHF, with its emphasis on providing affordable housing finance in rural India, aims to expand its business and positively impact the lives of underserved communities. The funding marks a significant boost for VHF's mission, while also highlighting the increasing importance of impact investing in driving financial inclusion in the country. As impact investing gains momentum, VHF's experienced team and strong technology platform position them for success in achieving their growth targets.
Varashakti Housing Finance (VHF) has secured a significant boost to its mission of promoting affordable housing in rural India with a substantial investment of $4.3 million (Rs 35 crore) from Incofin India Progress Fund, a private equity fund focused on growth equity capital for entrepreneurs. The funding marks the series A round for VHF and underscores Incofin's commitment to impact investing in the financial inclusion sector.
Incofin India Progress Fund, registered with the Securities and Exchange Board of India (SEBI) as a Category II Alternative Investment Fund (AIF), was launched in 2021 to support promising ventures that align with its vision of fostering sustainable development while delivering financial returns. With a primary focus on financial inclusion, the fund seeks to empower underserved communities and contribute to the country's economic growth.
Speaking on the investment, Aditya Bhandari, Partner & Regional Director, Asia Equity, Incofin, expressed the firm's optimism about the rural Indian affordable housing finance sector and its potential for transformative impact. Bhandari commended VHF for its experienced team and robust technology platform, expressing confidence that their combined efforts would yield success in achieving both financial and social goals.
Founded with a vision to bridge the housing finance gap in rural India, VHF has been striving to improve living conditions for the underserved segment of the population. The investment from Incofin will play a crucial role in accelerating VHF's growth trajectory, enabling the organization to expand its operations and positively impact the lives of rural communities. Sahaana Sankar, Co-founder and Director of VHF, emphasized that the funding would enhance their ability to serve borrowers, providing them with better access to home loans, home improvement loans, loans against property, and small ticket business loans.
As of June 2023, VHF has reported an impressive Assets Under Management (AUM) of Rs 119 crore and has established a presence through 28 branches. The company has ambitious plans to further extend its outreach and aims to reach an AUM of Rs 1,750 crore by catering to 30,000 borrowers in the next 5-7 years.
The investment from Incofin India Progress Fund not only marks a crucial milestone for Varashakti Housing Finance but also highlights the growing importance of impact investing in India. As more investors recognize the potential for financial and social returns, initiatives like VHF are poised to make a substantial difference in fostering financial inclusion and sustainable development across the nation.
In conclusion, Incofin's investment of $4.3 million in Varashakti Housing Finance demonstrates the rising interest in impact investing aimed at driving financial inclusion in rural India. With a strong foundation, experienced team, and forward-looking technology, VHF is well-positioned to make a significant difference in the lives of the underserved while achieving its ambitious growth targets.
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