32922 - DHFL Eduventures

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Summary of Investment Information

Project Number

32922

Company Name

AVANSE FINANCIAL SERVICES LIMITED

Date SPI Disclosed

Feb 4, 2013

Country

India

Region

South Asia

Projected Board Date

Mar 15, 2013

Environmental Category

FI-3 - No Impact

Status

Active

Last Updated Date

Nov 30, 2016

Department

Global Industry, Financial Markets

Industry

Financial Markets

Previous Events

Approved : Jun 27, 2013
Signed : Jun 28, 2013
Invested : Jul 15, 2013

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The project involves an equity investment by IFC in Avanse Financial Services Private Limited (“Avanse” or “the Company”), a specialized Greenfield Indian Non-Banking Finance Company (“NBFC”) , focused towards providing education loans for higher education. Avanse is an associate company of Dewan Housing Finance Limited (“DHFL”), a leading provider of housing finance in the country and a longstanding IFC investee.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	2.26

Development Impact

1. Increased access to finance for education: The project is intended to increase access to finance for education, a space that is substantially underpenetrated with less than 15% of the company''s target segment having any access to finance for this purpose. The company expects to provide loans to more than 60, 000 new students in the next seven years.

2. Demonstration effect: This project shall demonstrate a commercially viable model of NBFC financing for education in India and attract investments in this space. The success rate of banks in this space has been limited and it is hence critical that alternative financing models be encouraged. This project brings together a robust sponsor and management team, institutional shareholders and an existing distribution set-up which improve its chances of creating a strong demonstration effect.

1. Institutional Capacity Building: IFC would support the start-up Company in terms of building their systems and processes in the areas of credit appraisal and underwriting, risk management /control systems and corporate governance as it scales up. This would be accomplished through a suitably designed technical assistance package in conjunction with the Company.
2. Long term partner and credibility with potential partners: IFC''s key role at this stage involves potentially attracting lenders, providers of working capital and other equity investors in subsequent rounds of funding by signaling an institutional endorsement for the Greenfield venture''s business model.
3. Financial Additionality: IFC''s investment will help Avanse strengthen its balance sheet enabling leverage and potentially raise more equity capital over its build-up phase as envisaged in its business plan.

E&S Category Rationale / Risks and Mitigation

Contacts

For Inquiries About the Project, Contact

Mr. Neeraj SaxenaBusiness HeadAvanse Financial Services Private LimitedGr. Floor, Madhava Building,Bandra Kurla Complex,Near Family Court, Bandra – East,Mumbai – 400 051
Telephone: (91-22) 26583333/ 26474333
Fax: (91-22) 26583344

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