Alpen Capital has successfully advised Five Star Business Finance Limited, India (“Five-Star”) in raising a USD 20 million senior unsecured structured term loan facility from Swedfund International AB (“Swedfund”). The facility has a tenure of 5 years and is repayable in 5 semi-annual installments with the first installment payable 36 months after first drawdown. The end use of the funds is for onward lending to Five-Star’s clients who are individual microentrepreneurs running small businesses. The facility carries a fixed interest rate for the entire tenor and is the first foreign currency loan facility for the company.
About Five-Star Business Finance Limited: Five-Star Business Finance is a Chennai headquartered NBFC extending secured loans to micro-entrepreneurs and self-employed individuals, predominantly in the semi-urban markets. The company commenced operations in 1984 with a focus on consumer loans and vehicle finance. The leading global private equity funds (TPG, Matrix Partners, Sequoia, KKR, Norwest and TVS) own 77% equity stake of the Company. In 2005, it shifted its focus to small business loans with typical loan tickets of INR 2-10 lacs, which are predominantly backed by self-occupied residential properties.
About Swedfund International AB: Founded in 1979, Swedfund is the Swedish Government’s Development Finance Institution (DFI) for impact investments in developing countries. Swedfund invests in three main sectors – Energy & Climate, Financial Inclusion and Health by way of direct equity, debt or through intermediate vehicles such as funds. Climate, women’s empowerment and digitization are the three thematic areas for their financing activities.