Mahindra & Mahindra Financial Services Limited

completed

The project is to provide Rs.840 million (US$17 million equivalent) in long term local currency funding to MMFSL to: expand its product lines to include new businesses designed to capitalize on the company’s extensive rural branch network; take up insurance products distribution (both life & genera) either through itself or through its subsidiary/associate companies; better match its assets and liabilities; strengthen its capital base to position itself for future growth; and diversify its funding sources by assisting the company to go public at an appropriate time and eventually to raise funds in capital markets. IFC will have a strong role in the project as it will: (i) help MMFSL leverage off its extensive rural network to provide new products to rural customers and to help bring rural money into general circulation;(ii) help to diversify the company’s funding sources both in terms of debt and equity financing; (iii) provide long-term local currency debt financing to the company which will help it better manage its asset-liability mismatch;(iv) the project will send an important and positive signal to Indian financial markets and will help improve the image of non-bank financial companies (NBFCs) in India.The project is expected to have a strong development impact. It will: (i) contribute to improve access to financial products and services for both rural and semi-urban populations; (ii) help to deepen rural financial systems by offering a wider range of financial products and services; (iii) have a demonstration effect for other rural finance institutions and NBFCs, in expanding the range of financial services in rural areas.