International institutional capital is officially warming up to Indian private credit structures.
DEG, the German development finance institution (part of KfW Group), has approved a $25 million anchor investment in Vivriti Asset Management’s asset-backed securitization (ABS) fund. This marks DEG’s first-ever investment in an Indian debt fund.
🏦 THE DEAL DYNAMICS:
- Vehicle: Vivriti India Retail Assets Fund (VIRAF).
- Location: GIFT City (India’s emerging rival to Dubai/Singapore).
- Corpus: With DEG’s check, the fund hits ~$190 million (Targeting $250M total).
- Co-Investors: Joins a blue-chip roster including M&G Catalyst, IFC, and British International Investment (BII).
🔄 THE STRATEGY: THE $1 BILLION MULTIPLIER This isn’t just a static loan book. The fund utilizes an ABS structure with a 10-year term, allowing the manager to recycle capital multiple times.
- The Math: A $250M corpus can theoretically deploy up to $1 billion in cumulative loans over the decade.
- The Target: Financing Micro & Small Enterprises (MSMEs) and women entrepreneurs—sectors traditionally starved of credit but offering high yield and low correlation.
📈 GIFT CITY MOMENTUM: Prime Minister Modi’s pitch to make GIFT City a global hub is gaining traction. By domiciliating the country’s first ABS fund there, Vivriti has successfully attracted European development capital that typically sits in Luxembourg or Mauritius structures.
💡 ANALYST TAKEAWAY: The entry of DEG validates the “Securitization” model for Indian impact investing. Rather than direct lending, global DFIs are preferring pooled ABS structures to mitigate risk while accessing the grassroots Indian growth story. Expect more European DFIs to follow this “GIFT City Route” to bypass onshore regulatory friction.
👇 Private Credit Investors: Is the GIFT City structure finally robust enough to replace Mauritius for India-focused debt funds?