Vivriti Asset Management has received a US$20 million investment from the Development Bank of Austria (OeEB) for its Vivriti India Retail Assets Fund (VIRAF).

This brings the fund’s total capital to US$165 million, with an aim for a final corpus of US$250 million.

Launched in March 2023 at GIFT City, VIRAF focuses on asset-backed securitization to finance small-ticket retail and micro, small, and medium enterprises (MSME) loans.

According to Vivriti, over 75% of borrowers supported through VIRAF-backed loans are women.

🔗 Source: YourStory

🧠 Food for thought

1️⃣ Gender lens investing drives significant economic returns

The VIRAF fund’s 75% focus on women borrowers exemplifies the growing “gender lens investing” movement that blends financial and social impact objectives.

Research indicates that closing gender gaps in the economy could add $26 trillion to global GDP by 2025 1, highlighting why development banks like OeEB are increasingly targeting women’s economic participation.

This approach addresses a critical economic inefficiency in India, where women contribute only 17% to GDP compared to the global average, representing significant untapped potential for growth 2.

The business case for gender-focused investments extends beyond social impact. Companies with gender-balanced leadership teams consistently demonstrate higher financial returns, creating a compelling value proposition for investors 1.

Female entrepreneurs also create a multiplier effect in addressing gender inequality, as they are significantly more likely to hire other women (42% of employees in female-owned firms are women versus 23% in male-owned firms) 3.

2️⃣ Asset-backed securitization emerges as a scalable solution to the MSME funding gap

VIRAF’s focus on asset-backed securitization targets a massive global challenge. MSMEs represent 90% of businesses worldwide and generate 70% of employment, yet face an estimated $5 trillion funding gap in developing countries 4.

Traditional financial institutions often struggle to serve MSMEs due to perceived risk and high transaction costs, creating an opportunity for innovative financial structures like Vivriti’s ABS fund that can aggregate and distribute this risk.

The fund’s success in disbursing $200 million to 25 NBFCs, reaching 350,000 individuals and 100,000 MSME borrowers, demonstrates how securitization can efficiently channel capital to underserved segments at scale.