1. Which geographies does CII work in?
We make loans to companies operating anywhere in India.
2. What are CII’s Focus Sectors?
We have two major verticals: A wholesale lending vertical that provides financing to retail financial institutions and a corporate SME lending vertical that lends to Non-Financial Institutions.
We specialise and operate in sectors that are crucial for positive social and economic development including:
Financial Services (Microfinance, Small Business Finance, Affordable Housing Finance),
Food & Agribusiness
Clean Energy & Energy Efficiency
Education & Skill Development
ICT & Physical Connectivity
We also lend to SMEs across multiple other sectors. We do not lend to the waste management and recycling industry.
3. How much financing will CII provide and for how long?
We generally extend loans between INR 5 million and INR 150 million. Our effort will be to design a suitable loan and repayment structure based on the unique needs of your business. Typically we invest in a business for between 1 and 3 years. In some cases, we may decide to take a longer, up to five year, exposure.
4. What are the types of debt products that CII offers?
We offer senior secured debt, senior unsecured debt and subordinated debt. The debt exposure could be in the form of plain vanilla Term Loans, Line of Credit/Limits with flexible drawdown and repayment, Venture Debt with an equity kicker, Securitisation, Debentures or commercial paper.
5. What is the profile of businesses that CII invests in?
We generally extend loans to for-profit companies (including Producer Companies) and to Co-operatives. We do not generally lend to non-profits except in the case of microfinance on a selective basis.
The profile of enterprises we lend to includes:
Loss making companies, profitable at the EBITDA level
Companies making modest losses at the EBITDA level with a strong equity cushion and visibility of profitability in the next 12-18 months.
We do not consider pre-revenue companies or companies with less than INR 50 Mn in revenue. We do consider companies with slightly lower revenues on a case to case basis when the companies are backed by an entrepreneur with significant experience, track record and a significant equity cushion.
All our investees must have ethical, transparent operations, and good governance practices.We do not invest in not-for-profit organisations (NGOs) or proof-of-concept or R&D programs. We also do not consider any businesses that fall within our CII Exclusion List or do not meet any of the impact characteristics as mentioned below.
6. What kind of social impact must businesses supported by CII have?
We lends to businesses that have positive impact on society or the environment, which have one or more of the following characteristics:
Are targeted at lower income households in rural or urban locations
Enable access to products or services to underserved / non-Tier 1 locations. Preferably rural.
Enable access to products or services in low income Indian states
Generate or enable access to cleaner forms of energy
Creating jobs for the underemployed
Contribute towards adoption of sustainable practices for a cleaner/safer planet.
7. Will CII ask for collateral?
Collateral will always be considered in any lending process.
We are modelled to be a specialised lender for early and growth SMEs and our experience allows us to identify and manage risks associated with investing in such businesses. Our decision to lend is based primarily on the ability of the business to generate cash flows and the quality of the promoters. Collateral is an important but secondary consideration.
If an enterprise has little or no collateral but has the required expertise or experience and we are comfortable with the reasons for no collateral, we will consider investing in such a business, and we have done this several times in the past.
We make an assessment of collateral availability in the two ways. First, if someone has been in business or working for many years and has not build up assets we would want to understand why this is the case. Lack of assets may be an indication of weak business track record. Second, it is also a strong indicator of commitment. If an enterprise has the collateral but is not prepared to pledge this we may hesitate to invest as this could suggest that the entrepreneur does not believe in his own business plan and its chances of success.
In summary, we are prepared to invest in a business even if it does not have collateral to offer as long as the quality of the entrepreneur and the viability of the business is not in question. We will not invest in a business where there is adequate collateral available but the viability of the business is not evident.
8. How is CII different from any other lender?
We recognise that one of the key challenges that all early and growth stage businesses face is the lack of access to appropriate finance based on the needs of the business. We established CII with a specific mandate to address this gap in our chosen sectors.
Our team has a combined experience of 100+ years in making successful debt and equity investments in early and growth stage businesses. CII leverages this experience to provide debt to high quality enterprises. In order to ensure that all investment decisions are backed by a sound understanding of the underlying business, we also leverage the understanding of a network of experienced practitioners, advisors and specialised partner organisations. All clients benefit directly or indirectly from the experience and the networks that we have.
We focus on the unique needs of each high quality business and provide a largely customised solution that is structured to help the business grow. Unlike a broker or service facilitator, we invest our own funds in the businesses and hence our success is measured by the success of the businesses we lend to.