US International Development Finance Corporation (DFC) Provides $20 Million in Funding to Caspian Debt

Caspian Debt today announced a $20 million investment by the US International Development Finance Corporation (DFC) as long-term debt. The new facility, which is a combination of subordinated and senior debt, will help Caspian Debt digitally provide personalized, collateral-free loans to professionally managed businesses operating in high-impact sectors in India, including microfinance, SMEs, affordable housing, affordable healthcare, sustainable agribusiness and education.

Caspian Debt primarily works with first-generation social entrepreneurs, who struggle to raise working capital as they run new-era businesses with an asset-light model, and have no collateral to offer. Many of these companies are well capitalized and growing rapidly, but need more responsive lenders.

Caspian Debt, with this facility, also commits to directing 33% of its investments into women-centric businesses and fulfilling its commitment to DFC’s 2X Women initiative. 2X has catalyzed over $2 billion in private sector investment in companies and funds owned by, led by, or providing a product or service that intentionally empowers women in the developing world.

“Caspian Debt has lent over $219 million to over 140 start-ups contributing to 13 Sustainable Development Goals (SDGs) over the past 7 years. We are excited to deepen our relationship with DFC as our partnership continues. to provide much-needed firepower to support underserved start-ups and women-centric businesses. We will use this funding to focus on fostering disruptive entrepreneurs, who push the boundaries of creating lasting impact. This DFC’s vote of confidence is even more valuable at a time when the whole world, especially small and medium-sized businesses, is dealing with the economic consequences of a global pandemic,” said S. Viswanatha Prasad Founder and Managing Director of Caspian Debt.

“Small businesses are the engine of growth and job creation in India, and high-impact businesses are the vehicle to achieve a more responsible, sustainable and equitable economic future. We approved our first loan to Caspian Debt in 2014, when it was still a start-up business. Five years later, the results are impressive. This follow-on loan is an expression of our confidence in the important work that Caspian Debt is doing and demonstrates our long-term commitment, especially in these uncertain times,” said Anthony Randazzo, CFA Director of Investments within the Social Enterprise Finance team at DFC.

DFC, formerly Overseas Private Investment Corporation (OPIC), has supported the growth of Caspian Debts since 2014. This new funding, partly in the form of Tier 2 capital, will further strengthen Caspian Debt’s capital adequacy and ability to raise further debt financing, which will lead to a strong multiplier effect. Long-term debt financing to impact targeted entities like Caspian Debt will enhance their ability to provide flexible debt solutions to meet the demands of the professionally managed entrepreneurial ecosystem in today’s challenging economic scenario.

Comments are closed.