Five-Star Business Finance Limited is a South India-focused lender to small businesses. It provides lending products and services targeted at small enterprises in the region. The company has raised $234 million from a consortium of leading global and Indian investment firms. Reported investors include Sequoia and KKR. The article does not disclose product roadmap, future plans, or operating metrics. The financing provides additional capital to support its lending operations in South India. Five Star Business Finance extends property-secured business loans to micro-merchants, predominantly small kirana stores and street corner shops. The company has built a physical network of more than 200 branches with a 2,250-member team and is present across eight states, predominantly in south India, with expansion into Maharashtra, Madhya Pradesh and Chhattisgarh. Its loan book reached Rs 2,500 crore in 2019 and management aimed to grow it to Rs 4,000 crore by March 2020. The lender reports a sub-1% gross non-performing asset level and has maintained profitability focus and tight underwriting. Historically backed by investors including Matrix Partners, Morgan Stanley, Sequoia Capital and Norwest Venture Partners, the company has raised total equity of less than $200 million to date. Five Star Business Finance is a Chennai-based non-bank finance company offering fully-secured small-business loans, primarily serving under-banked customers in South India. It provides loans to nearly 40,000 customers, including single-shop retailers such as vegetable vendors, provision stores, food retailers, and self-employed individuals. The company focuses on borrowers who typically lack formal financial records, tailoring products for that segment. Founded in 1984 and led by Chairman and Managing Director D. Lakshmipathy, Five Star operates more than 150 branches across six states. The firm manages approximately Rs. 1,220 crores in assets. Five Star Business Finance is a Chennai-based non-banking financial company focused on small-ticket business and housing loans for MSME and self-employed customers. It serves small shop owners, small & medium machine shop operators, and others, and also provides home-improvement loans via a housing subsidiary. The company operates 110 branches across South India, serves more than 18,000 customers, and has an average ticket size of Rs 3–4 lakhs. Management aims to double the loan book to ₹1,000 crore this financial year. Five Star says it has developed expertise in assessing cash flows and underwriting credit while keeping asset quality intact and maintains 15+ bank relationships. The fresh funding will be used to expand the loan portfolio and to partly increase home loan activity at the housing subsidiary. Five Star Business Credits offers secured loans to MSME customers such as small shop owners, machine shop operators and self-employed individuals, and also provides home-improvement loans to its customer base. The company uses a proprietary secured lending and credit-assessment model designed to serve underserved MSME borrowers. Over the last five years it has served more than 5,000 MSME customers and operates across 30 branches in Tamil Nadu. Five Star positions itself to address a large underserved market of formal and unorganized MSMEs in India. Management says the company plans to expand its branch footprint across different states in India. The firm emphasizes collateral-backed, sustainable lending as its core operating approach.

Total raised

$434M

Funding rounds

5

Latest round

Equity

Latest activity

Mar 2021