46651 - DCM Manappuram

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Summary of Investment Information

Project Number

46651

Company Name

MANAPPURAM FINANCE LIMITED

Date SPI Disclosed

May 26, 2022

Country

India

Region

South Asia

Projected Board Date

Jun 27, 2022

Environmental Category

FI-3 - No Impact

Status

Completed

Last Updated Date

Nov 9, 2025

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Previous Events

Approved : Jun 27, 2022
Signed : Jun 30, 2022
Invested : Jul 20, 2022

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The proposed project is a senior secured loan of up to US$ 100 million in equivalent INR in the Company through subscription to non-convertible debentures (NCDs) to an existing IFC portfolio client, Manappuram Finance Limited (MFL or the Company), for a tenor of up to 3 years. The proposed project supports underserved individuals in the economy with focus on directing a portion of the debt towards women borrowers.

MFL is a registered NBFC under the Reserve Bank of India (RBI) primarily offering gold loans, i.e., loans against pledge of gold jewelry. The Company was founded by Mr. V.C. Padmanabhan, father of current MD & CEO Mr. V.P. Nandakumar, in 1992 in Kerala. As on March 2022, MFL has consolidated assets under management (AUM) of INR 303bn (US$3.9bn) and a workforce of over 40,000. Its long-term debt is rated AA/stable by CRISIL.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	100.74
Equity

IFC's loan to the financial institution described in this SII is targeted for on-lending to the following sector(s):

Product Type	Use of Proceeds
Straight Senior Loan	Others (only if UoP is not available)

IFC's Definitions of Targeted Sectors can be found here.

Development Impact

Stakeholders: Increased access to finance for underserved individuals. The Company will support underserved individuals in the country whose livelihoods were severely impacted by the COVID-19 pandemic. The Project will increase access to finance to these low-income borrowers who need funds to rebuild their lives, maintain small businesses and meet medical expenses. Along with the proposed investment, IFC will also support women, who are underserved as they often do not possess credit history or other assets to use as a collateral. Once the borrower engages with MFL through gold loans or micro loans, the borrower is also introduced to other products such as vehicle loans and home loans that help borrower’s access to finance into other areas as well. Inclusiveness: Gold lending addresses a crucial financing gap for the underserved, who often do not possess credit history or other assets to use as collateral. This investment will help MFL to extend lending to the underserved segments and is expected to stimulate other players in the market to increase their financing for un/underbanked when the country needs support to recover from the COVID-19 crisis.

Long Tenor Financing: The current debt financing received by MFL is primarily in the 1-3 year amortizing loan category and IFC’s 3-year loan will provide liquidity and support asset liability management. Non-commercial risk mitigation: MFL is an existing portfolio client of IFC, whose investment three years ago has been instrumental in making other lenders comfortable with MFL, providing the Company greater access to funding from domestic lenders, and at a lower cost. It also enhanced the profile of the gold loan segment which has seen increased participation from banks and other NBFCs since then. The participation of foreign lenders, towards gold loan focused companies in India has however been low and with the pandemic they have been even more risk averse to taking exposure to newer segments. IFC has been the only major foreign lender to MFL as of Dec-2021, and now with the current facility, is expected to provide comfort to foreign lenders who still view the segment in India as somewhat risky.

E&S Category Rationale / Risks and Mitigation

The project entails a senior loan of US$100million to Manappuram Finance Limited's (MFL) to support its on retail on lending through secured gold loans to individuals with a focus on women borrowers of India for education, medical emergency, marriage and other short term contingencies. This presents limited to no Environmental & Social risks and the project has been categorized as FI-3 in accordance with IFC's Environmental and Social Sustainability Policy. The project will not support coal-related activities or higher risk business activities that may involve a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, or d) significant Occupational Health and Safety risks. MFL has been an investment client of IFC and has a satisfactory E&S risk management system (ESMS) in place. The ESMS details the policy, and procedures, to be followed for all transactions where applicable and includes the IFC exclusion list. The Company's HR policies are in accordance with Performance Standard - 2 requirements and follows the applicable Life and Fire Safety requirements.

Contacts

For Inquiries About the Project, Contact

Manappuram Finance Limited
Bindu AL
EVP Finance
0487 - 3050301
bindhu@manappuram.com
Mailing Address Manappuram House, P.O Valapad, Thrissur, Kerala - 680567
www.manappuram.com

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