Pahal Financial Services Raises $10M in Equity and Debt Capital

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A microfinance institution based in Ahmedabad, Pahal Financial Services Pvt. ltd. recently closed a $10 million (INR 75 Crs) fundraising through a seed round from European impact investment firm, GAWA Capital (through its investment vehicle Huruma Fund) and d a round of debt from the advised debt vehicle of GAWA Capital (Magallanes Impacto FIL) and Capitale de l’Arc Nord.

Pahal previously raised equity from Dia Vikas Capital and BOPA (Base of Pyramid Asia).

Pahal, which is on a mission to provide quality services to its clients through a range of financial and non-financial products and services, has so far touched the lives of nearly one million households from marginalized communities, through to its over 210 branches in its 8 states – Gujarat, Rajasthan, Madhya Pradesh, Maharashtra, Bihar, UP, Chhattisgarh and Haryana.

Pahal constantly strives to identify the changing needs of its existing and future customers and designs the products and services to support them accordingly.

Pahal, to date, has served over 65,000 borrowers for agricultural purposes and with this current investment from GAWA Capital, he seeks to strengthen his portfolio of agricultural and related services by leveraging GAWA’s experience in working and support for farmers in developing countries.

This will be Huruma Fund’s second equity investment in India, demonstrating its belief in driving agriculture-based economic development in India and its confidence in the Pahal team to execute on this vision.

Magallanes Impacto FIL, managed by Magallanes Value Investors and advised by GAWA Capital, and Northern Arc Capital will contribute equally to the loan capital raised by Pahal in connection with this transaction.

Speaking on the occasion, Kartik Mehta, co-founder and managing director of Pahal Financial Services, said: “Pahal was created with the aim of serving the vulnerable sections of society and has become one of the microfinance institutions fastest growing. in India. Pahal’s vision will be further strengthened by this round of investment and plans to increasingly focus on the backbone of India’s economy, agriculture. GAWA’s support is a validation of our business model and approach to new age microcredit in India.

Purvi Bhavsar, Co-Founder and Managing Director of Pahal Financial Services said that “Pahal has just passed the AUM of Rs1000 Crores. positioning itself as a micro fintech entity while expanding its product range in various rural and semi-urban sectors Coupled with the regulatory changes recently announced by the Reserve Bank of India for the microfinance sector, Pahal is well positioned to serve the underserved sections of society.

Luca Torre and Agustin Vitorica, Founders and Co-CEOs of GAWA Capital, said: “We are very pleased to partner with Pahal and look forward to supporting them in their next level of growth and expansion into new geographies and new products. We believe that with the help of Pahal, the deeply underserved farming community in India can focus on farming and increase their income and standard of living. The microfinance sector in India has traditionally not been able to serve smallholder farmers with ad hoc products. We believe Pahal is up to the challenge and serve this untapped segment with great products and services.

Unitus Capital acted as exclusive advisor to Pahal for this capital increase. About Pahal Financial Services Pvt. Ltd Pahal is a company registered with the Reserve Bank of India as a non-bank financial company that provides microfinance services to low income households.

Kartik Mehta and Ms. Purvi Bhavsar, former bankers with over 50 years of combined experience, founded the company in 2011. Based in Ahmedabad, it has over 210 branches and over 1,800 employees. Currently, Pahal serves over 3,50,000 active clients, with total assets under management of over Rs 1,000 Crores.

(With PTI entries)

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Posted: Wednesday, April 13, 2022, 11:08 a.m. IST


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