India, May, 17 2021 - Fusion Microfinance has raised 10 million euro (about Rs 88 crore in local currency) in debt from Bank im Bistum Essen (BIB), a Germany-based cooperative bank.

It's BIB's first ever debt funding in India as the overseas firm looks to be a part of India's microfinance story, which is facing challenges as income generation takes a hit among the weaker section of the population amid a raging second wave of the covid pandemic.

This is Fusion's first external commercial borrowing, managing director Devesh Sachdev said. "It opens a new channel of funding for us in the midst of a challenging environment,," he said.

The capital will help the Delhi-based MFI to on-lend to women borrowers from low-income households, increasing their access to finance.

Northern Arc Capital facilitated the deal.

"We believe that especially in these turbulent times it is more important than ever to show a strong commitment and support to the underprivileged women entrepreneurs active in the rural areas of the country," Markus Christ, senior investment officer (Asia) at BIB was quoted as saying in a press statement.