52059 - Finova ECB

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Summary of Investment Information

Project Number

52059

Company Name

Finova Capital Private Ltd

Date SPI Disclosed

Jul 7, 2026

Country

India

Region

South Asia

Projected Board Date

Sep 11, 2026

Environmental Category

FI-3 - No Impact

Status

Pending Approval

Last Updated Date

Jul 8, 2026

Department

Regional Industry - FIG Asia & Pac

Industry

Financial Markets

Sector

Other Non-Banking Financial Institution (NBFI)

Project Description

The Project comprises of a US$ denominated, senior secured loan of up to US$50 million in Finova Capital Private Limited (Finova or the Company) for a tenure of 4 years in one or more tranches. The Company will utilize IFC’s investment proceeds for growing its loan book towards micro and small enterprises (MSEs) and self-employed borrowers/ microentrepreneurs, including women borrowers and agricultural segment including dairy.

Associated Advisory Engagement

IFC will guide the Company in developing a social finance framework to facilitate IFC investments and mobilize additional private sector capital for social projects. This will include supporting Finova with their external review process through a second party opinion (SPO), exploring opportunities to address gender-related financing needs, financing targeted at the agriculture sector and supporting Finova in identifying social impact indicators for its first social finance framework impact report.

Sponsor / Cost / Location

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	Loans to MSME (mix of Micro and SME)
Syndications	Loans to MSME (mix of Micro and SME)

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

Development Impact

Increased access to finance for MSMEs, including women borrowers: IFC expects that the proposed investment will increase access to finance for underserved micro enterprises and self-employed borrowers/microentrepreneurs including women borrowers. Competitiveness: IFC anticipates that the Project will promote greater competitiveness in the NBFC sector by encouraging NBFCs to grow their MSME portfolios, especially to underserved, harder-to-reach segments like microenterprises, self-employed individuals, and women borrowers, in small towns and rural areas.

IFC will provide both financial and non-financial additionality through this Project. Financial additionality will be provided via financing structure by providing long tenor U.S. dollar-denominated financing, helping the Company diversify its funding base and strengthen its asset liability profile. Non-financial additionality will be provided to the Company in form of knowledge, innovation and capacity building by supporting the client to structure its first social loan, helping to prepare Social Finance Framework, and checking the eligibility of the social projects for the social impact.

Indicator	Metrics	Comments	Calendar Year 2022	Calendar Year 2023	Calendar Year 2024
Number of Outstanding Loans, Agri: Microenterprises	number	Outstanding number of agri (dairy)-microloans	Not Available	Not Available	Not Available
Number of Outstanding Loans, MSMEs	number		Not Available	Not Available	Not Available
Number of Outstanding Loans, Microenterprises	number		Not Available	Not Available	Not Available
Number of Outstanding Loans, Women-led Microenterprises	number		Not Available	Not Available	Not Available
Target group as a share of reference MSME loan portfolio	%	Share of outstanding volume of microloans as a total loan book	Not Available	Not Available	Not Available
Target group as a share of reference MSME loan portfolio	%	Share of outstanding number of microloans to women as a total MSME loan book	Not Available	Not Available	Not Available
Value of Outstanding Loans, Agri: Microenterprises	$	Outstanding volume of agri (dairy) -microloans	Not Available	Not Available	Not Available
Value of Outstanding Loans, MSMEs	$		Not Available	Not Available	Not Available
Value of Outstanding Loans, Microenterprises	$		Not Available	Not Available	Not Available
Value of Outstanding Loans, Women-led Microenterprises	$		Not Available	Not Available	Not Available

E&S Category Rationale / Risks and Mitigation

The IFC loan proceeds will be utilized by Finova for on-lending to micro and small enterprises (MSEs), and self-employed borrowers and microentrepreneurs with a ticket size of less than US$10,000. The eligible use of proceeds present limited E&S risks that are localized, low in magnitude, and readily addressed through standard screening and risk management measures. The IFC loan will not support higher risk activities that may include involuntary resettlement, risk of adverse impacts on indigenous peoples, significant risks to or impacts on the environment, community health and safety, biodiversity, cultural heritage, significant retrenchment, or significant occupational health and safety risks. The loan will also not support any coal-related activity. Hence, the E&S risks and impacts of the Project will be low and mostly relate to exposure to activities on the IFC Exclusion List. The Project is categorized as FI-3 according to IFC's Policy on Environmental and Social Sustainability. The applicable performance requirements will be the IFC- FI Exclusion List, and applicable laws. The HR policies of Finova are aligned with Performance Standard - 2 requirements and the company follow the applicable Life and Fire Safety requirements.

Given the limited E&S risk profile of the proposed transaction and the restricted use of proceeds, a full scale ESMS is not required. Finova has an E&S policy and ESMS which is currently under review. As part of this review, Finova will update its negative profile list with IFC FI Exclusion List and ensure that sub-loans supported by IFC proceeds are screened for compliance with the key E&S laws and regulations as applicable to the MSE segment.

Contacts

For Inquiries About the Project, Contact

Finova Capital Pvt Ltd
Mr. Amit Jha
Deputy CFO

amit.jha@finova.in

https://finova.in/

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