International Finance Corporation (IFC) today said it has invested USD 10 million as equity in an ecommerce platform Power2SME to improve access to finance for small and medium enterprises (SMEs)
In addition to the investment, IFC will also advise Power2SME to help it expand beyond its current 14 states, 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.
"Our investment of USD 10 million in Power2SME will spur greater venture capital interest in the SME sector in the country and support India's vision to become a global manufacturing hub," IFC South Asia Venture Capital and Private Equity Lead Ruchira Shukla said in a statement issued here.
She further said by working with SME-focused companies and partner financial institutions, we aim to improve access to finance for over one million SMEs in the next five years.
Backed by venture capital firms such as Kalaari Capital, Accel Partners, and Inventus Capital and veteran industrial leader Nandan Nilekani, Power2SME, an ecommerce platform that helps SMEs buy raw materials at bulk prices and get working capital without collateral.
"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," Power2SME Founder and CEO R Narayan said.
He further said since SMEs are critical to making India a manufacturing hub, it is necessary to foster the sector if we are to meet the national imperative of inclusive growth.
"We aim to continue strengthening the SME ecosystem by addressing key challenges that are roadblocks to SME growth. We have aggressive plans to boost our revenues and continue on our path of profitability," Narayan added.
There are 48.8 million MSMEs in India that form a large part of the Indian economy, accounting for 45 per cent of the country's industrial output and 40 percent of its exports and employing 111 million people, the release stated.
IFC has invested close to USD 1 billion in financial intermediaries in India to enable credit financing for SMEs.
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