Chennai (Tamil Nadu) [India] Feb 25 (ANI/PRNewswire): Prayaan Capital Private Limited, a South India-based NBFC that lends to micro, small, and medium-sized enterprises (MSMEs) in India announced the closure of a USD 1.2 million seed investment round led by Accion Venture Lab, Accion's seed-stage inclusive fin-tech investment initiative.
While access to credit for entrepreneurs in India is beginning to improve, there is still an estimated MSME credit gap of USD 400 billion, according to the IFC.
Prayaan Capital works to meet this need through an innovative business model that leverages BrickMortar branches and both back-endcustomer-facing digital tools in order to help small businesses digitize their operations and gain access to credit.
"With credit needs that are too small for traditional financial institutions and too large for microfinance lenders, many of India's entrepreneurs remain unable to access the credit they need to sustain and grow their businesses. Accion Venture Lab exists to help inclusive fin-tech start-ups like Prayaan Capital leverage technology to meet this need", said Accion President and CEO Michael Schlein.
"With its innovative approach and a strong, experienced team, Prayaan Capital is a welcome addition to our portfolio. The company not only helps entrepreneurs gain access to credit but also helps accelerate the digital transformation of their businesses, leading to greater efficiency and growth", said TahiraDosani, Managing Director of Accion Venture Lab.
Accion Venture Lab provides capital and extensive support to innovative fintech startups that improve the reach, quality, and affordability of financial services for the underserved and have the potential to scale.
Backed by commercial and impact investors since the launch of its third-party fund in 2019, Venture Lab has invested in more than 40 early-stage start-ups that operate in 30 countries worldwide.
Founded by two seasoned bankers, Madhan Mohan and Akash Chelvam, Prayaan Capital has strategically positioned its base in South India, which has a plethora of small scale manufacturers and unorganized tier 34 traders, all of whom are potential consumers of their products.
With six operational branches in Tamil Nadu, Prayaan has already disbursed Rs 80 million to a varied customer base of small-scale entrepreneurs. Prayaan will use this new influx of capital to invest in technology and expand its operations.
"We have the vision to make a difference for India's MSMEs by providing a holistic financial journey that addresses all of their business needs and brings them into the formal financial ecosystem. We are excited to collaborate with Accion Venture Lab, which brings insights from its work with fin-techs working to reach the underserved across four continents. We take Venture Lab's investment as a sign of their confidence in our potential for continued growth and impact. We always keep our focus aligned with our customers and join each one on their financial journeys. Our aspiration is to be a 'neighbourhood lender' to which these small businesses go for credit and other financial products. This latest milestone is the tip of the iceberg, and we expect continued growth and impact thanks to our innovative technology platform and value-add services", said Madhan Mohan, MDCEO of Prayaan Capital Private Limited on this milestone.
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