The International Finance Corporation (IFC), the private sector investment arm of the World Bank Group, has proposed an investment of up to ₹1,425 crore (around $150 million) in securitised assets of Cholamandalam Investment and Finance Company Ltd (Chola) to expand credit access for micro, small and medium enterprises (MSMEs), particularly in rural and semi-urban India.
The proposed investment will enable the Chennai-headquartered non-banking financial company (NBFC) to extend commercial vehicle loans to MSMEs, self-employed individuals and borrowers purchasing tractors and vehicles used for transporting agricultural and farm-related produce.
Strengthening credit access
According to IFC, the investment is expected to improve access to formal finance for underserved MSMEs, self-employed entrepreneurs and agri-linked borrowers who often face challenges in obtaining credit from traditional banking channels.
India’s MSME sector remains a key driver of economic growth and employment, but access to affordable financing continues to be a major hurdle, particularly in smaller towns and rural markets.
The proposed transaction is also expected to demonstrate the viability of scaling financing to underserved borrowers, encouraging wider participation by financial institutions in the segment.
Chola’s extensive reach
Part of the Murugappa Group, Chola is among India’s leading NBFCs, with assets under management (AUM) of $23.6 billion as of March 31, 2026.
The company serves more than five million customers through a network of 1,761 branches across the country.
Chola primarily lends to MSMEs engaged in transportation and other sectors, many of whom have limited credit histories and are unable to access funding from commercial banks. In addition to commercial vehicle finance, the company offers loans against property, affordable housing finance, consumer loans and personal loans, with a significant presence in semi-urban and rural markets.
Shareholding pattern
Chola is listed on both the BSE and the National Stock Exchange (NSE).
As of March 31, 2026, the promoter and promoter group held 49.25% of the company’s equity, while foreign institutional investors (FIIs) owned 25.41%, domestic institutional investors (DIIs) held 20.50%, and the remaining 4.84% was held by public shareholders.
IFC to provide financial and strategic support
Besides providing long-term capital, IFC said it will also bring non-financial support through resource mobilisation and strategic engagement.
The multilateral lender expects the investment to attract additional funding into the sector while promoting greater competitiveness through demonstration and replication of successful financing models for underserved MSMEs and self-employed borrowers.
The proposed investment aligns with IFC’s broader objective of enhancing financial inclusion and supporting sustainable economic development by expanding access to credit for businesses that play a vital role in India’s economy but remain underserved by formal financial institutions.