British International Investment
12 July 2023

Veritas Finance proves being commercially scalable and impact-driven can go hand in hand

  • BII has made a partial exit from Veritas Finance and remains a minority stakeholder in the Indian lender for SMEs
  • Capital from the stake sale will be re-invested in more impactful businesses

British International Investment plc (BII), the UK’s development finance institution (DFI) and impact investor, today announced a partial divestment of its equity stake in Chennai-based non-banking financial company Veritas Finance to a consortium led by the domestic private equity fund, Multiples.

The stake sale highlights a fruitful partnership that has catalysed sustainable and inclusive growth in India’s small and medium-sized enterprises (SME) sector. Veritas Finance, in which BII invested in 2017, serves SMEs often run by families or individuals from low- and middle-income households predominantly in India’s rural and semi-urban areas, creates a bridge for businesses that fall outside the traditional banking sector.

Since BII’s investment, Veritas’ customer base has grown from 12,000 across 60 branches in three states with 500 staff to over 116,000 across 287 branches in eight states, with over 4,400 staff. Its loan book has grown rapidly to INR 35,337m (c. $430m) as of March 2023.

BII’s technical assistance facility, BII Plus, played a crucial role in catalysing Veritas Finance’s remarkable growth during this period, helping the company to move from a paper-based system to a digital and automated system of loan assessments that allowed it to approve more loans and cut turnaround times in half.

Mr. Manav Bansal, Managing Director and Head of India at BII said, “Our initial investment in Veritas Finance in 2017, exemplifies BII’s commitment as a DFI to catalyse sustainable growth and enhance living standards. We are proud to have partnered with Veritas, a company that has transformed access to finance for underserved SMEs, and continue to support its growth. As we partially exit our investment, we celebrate not just the financial return, but also the social and economic impact. BII plans to recycle the returns from the sale into further impact-driven businesses, underscoring our commitment to fostering sustainable development.”

Mr. D Arulmany, Managing Director & Chief Executive Officer of Veritas Finance commented on the partnership, “Our journey with BII started very early. BII, partnered with us and supported the financial inclusion initiatives and facilitated quicker scale up of the branch network, to identify and enter new underserved geographies and further deepen the distribution reach in existing geographies.  In addition to continued capital for business growth, BII also extended long term debt, technical assistance to enhance the technology platform and during the last few years, BII has stayed close to the team and had periodical interventions to help further sharpen the focus on many non-business initiatives including gender diversity, customer literacy, financial awareness etc. We keenly look forward to further strengthening and leveraging our association with BII, who continue to be one of our major shareholders, as we enter the phase II of our financial inclusion journey.”

By investing patient and flexible capital in a diverse range of financial services businesses like Veritas Finance, BII continues in its goal to support underserved SMEs through increasing access to finance and thus create productive, sustainable and inclusive economies.



Notes to Editors:

British International Investment media contact: [email protected]

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