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2014-03-01

Matrix Partners India invests in MSME lender Five Star Business Credits

Investment firm, Matrix Partners India which has Rs 3,000 crore under management has announced that it has led the first institutional round of funding in Five Star Business Credits (Five Star), a small business finance company that lends secured loans to MSMEs.

Investment firm, Matrix Partners India which has Rs 3,000 crore under management has announced that it has led the first institutional round of funding in Five Star Business Credits (Five Star), a small business finance company that lends secured loans to MSMEs.

 

“MSME lending is a significantly underserved market in India not addressed by formal financial channels. We have built a unique credit assessment model for deserving customers that run small but healthy businesses. All our loans are collateral backed. We are excited to partner with Matrix Partners India as our first institutional investor. Matrix shared our beliefs & values in sustainably addressing this large MSME financing opportunity. This round of funding should help us further expand our branch footprint & enhance our funding base for long term expansion,” said D. Lakshmipathy, Managing Director, Five Star.
 

“Five Star has a highly differentiated, secured and sustainable lending model to address the large, underserved MSME financing opportunity. We share Lakshmipathy’s vision & passion for this sector and look forward to being his partners in this journey. Financial services is an important focus area for the firm,” said Rishi Navani, Managing Director, Matrix India.

 

Five Star with its proprietary secured lending model has catered to more than 5,000 MSME customers over the last 5 years. The company also provides loans for the purpose of home improvement to MSME customers.

 

India has 29.8 million MSMEs and a further 30 million MSMEs in the unorganized sector. Formal banking and financial channels find it challenging to address the needs of MSME customers primarily due to the challenges in assessing credit quality of such customers.

 

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