Fair Valuation of a Micro Lending Business for a leading Indian Financial Institution

Client : An Eminent Micro Lending Business

Service Offered : Buy-side Valuation for a Transaction

Sector / Industry : Banking and Finance


Our client (Client) is a leading Indian financial institution, specializing in providing debt financing to self-employed entrepreneurs, Micro, Small & Medium Enterprises (MSME)and consumers in India. The Client had successfully used technology-led models to finance MSMEs and Indian consumers, in unbanked and under-penetrated segments. They also planned to further penetrate the micro and small lending segment by investing in an upcoming technology-driven micro lending business (the Target) that primarily focuses on micro enterprises.

The Target, a Mumbai based FinTech start-up, tied up with merchant aggregators to provide loans to its customers, which included local convenience stores, shopkeepers, traders, etc. These aggregators give relevant information to the Target, based on which the eligible merchants are identified using predefined criteria. The Target uses a technology platform for credit-scoring and loan management that comprises of decision engines, aggregator APIs (partner integrations) and money movement APIs (bank integrations). The Target also tied up with lending institutions to provide loans through their balance sheets. Though the loans sit in the books of the partnered lending institutions, the Target conducts the entire process involved in the lifecycle of a loan, from origination to collection.


We presented our findings to the Client in the form of a valuation note detailing our valuation approach, peer selection process, and valuation conclusion.

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