Indian microfinance lender Arohan Financial Services Ltd. It has secured an investment commitment of up to $30 million to support the expansion of its loan portfolio and increase access to credit for low-income borrowers, according to the project document seen by . Crowdfunding insiders.
The commitment comes from the Dutch development bank FMO. The proposed transaction will involve a three-year investment in Indian rupees through senior, secured and unlisted non-convertible bonds.
The proceeds will be used to further grow Arohan’s loan portfolio, particularly in underserved rural and semi-urban markets in northern and eastern India.
Headquartered in Kolkata, Arohan is a technology-enabled, non-banking finance company focusing on microfinance and forms part of the impact investing-focused Aavishkaar Group.
The company provides loans to approximately 1.95 million low-income customers, with a focus on women entrepreneurs.
The lending model includes a collateral-guaranteed joint liability group framework where borrowers form groups and share the responsibility of loan repayment.
As of December 31, 2025, Arohan managed a portfolio of assets under management in excess of $660 million. It operated more than 1,000 branches in 17 states of India and employed more than 9,000 people.
The lender is backed by development finance and investment institutions including FMO, Denmark’s Investment Fund for Developing Countries, known as IFU, and Maj Invest.
FMO said India continues to face a significant gap in access to formal credit among low-income and rural households, especially women running small businesses.
The development bank said Arohan’s lending model enables it to reach underserved customers in areas where access to traditional banking and formal credit remains limited.
The proposed financing is expected to support Arohan’s expansion into under-penetrated regions and expand its reach to borrowers in northern and eastern India.
FMO said the investment will support inclusive economic growth and contribute to United Nations Sustainable Development Goal 10, which aims to reduce inequalities.
Arohan is classified by the FMO as a frequent borrower; This means the lender has an established framework for evaluating recurring financing transactions involving the company.
FMO has assigned the proposed investment a Category C environmental and social risk classification, the lowest risk category.
Microfinance investments are generally thought to have relatively limited environmental and social risk because borrowers are typically individuals, retailers and micro-entrepreneurs rather than companies involved in large industrial or infrastructure projects, the lender said.
However, the FMO said microfinance loans may still involve risks such as borrower over-indebtedness, lack of transparency around interest rates and concerns about responsible pricing.
These risks are assessed individually through tools including FMO’s Customer Protection Principles framework, which examines how lenders treat borrowers and whether their products are offered responsibly.
The FMO said it may also conduct a human rights assessment if a transaction involves high contextual risks.
The proposed investment remains subject to FMO approval and completion of the lender’s review process.
