Chennai, May 29 (IANS): City-based non-banking finance company (NBFC) Cholamandalam Investment and Finance Company Ltd on Wednesday said it has entered into an agreement to raise $222 million debt from the International Finance Corporation (IFC) and others.

According to Cholamandalam Investment, the company will raise $222 million debt funds in the form of US dollar bonds from IFC ($92 million), First Abu Dhabi Bank ($50 million), MUFG Bank Ltd ($50 million), National Bank of Ras Al-Khaimah PJSC ($20 million), and CTBC Bank Co Ltd ($10 million).

The debt raising is being anchored by IFC, which is the private financing arm of the World Bank.

By bringing in foreign banks as investors, IFC is helping Cholamandalam Finance diversify its funding sources.

This is the company's first US dollar-syndicated deal since January 2019, when the Reserve Bank of India permitted NBFCs to tap into the offshore credit market.

"Supporting productive asset financing NBFCs is part of our financial inclusion strategy because it offers income opportunities and an escape from poverty to low-income households," said Jun Zhang, IFC Country Head, India.

"Cholamandalam's wide reach amongst small road transport operators and MSMEs makes it the right partner for us to reach these underserved segments," he added.

Cholamandalam Investment's core business is in providing commercial vehicle finance and loan against properties. The company has recently forayed into affordable housing loans for low-income customers.