Matrix Partners India invests in Five Star Business Credits

Mumbai, India '“ February 28, 2014: Matrix Partners India today announced that it has led the first institutional round of funding in Five Star Business Credits ('˜Five Star'). Five Star is a leading small business finance company that provides secured loans to micro & small enterprise customers ('˜MSME'). Five Star with its proprietary secured lending model has catered to more than 5,000 MSME customers over the last 5 years. The company also provides loans for the purpose of home improvement to MSME customers. India has 29.8 million MSMEs and a further 30 million MSMEs in the unorganized sector. Formal banking and financial channels find it challenging to address the needs of MSME customers primarily due to the challenges in assessing credit quality of such customers.

"MSME lending is a significantly underserved market in India not addressed by formal financial channels. We have built a unique credit assessment model for deserving customers that run small but healthy businesses. All our loans are collateral backed. We are excited to partner with Matrix Partners India as our first institutional investor. Matrix shared our beliefs & values in sustainably addressing this large MSME financing opportunity. This round of funding should help us further expand our branch footprint & enhance our funding base for long term expansion.' said D. Lakshmipathy, Managing Director, Five Star

"Five Star has a highly differentiated, secured & sustainable lending model to address the large, underserved MSME financing opportunity. We share Lakshmipathy's vision & passion for this sector and look forward to being his partners in this journey. Financial services is an important focus area for the firm.' said Rishi Navani, Managing Director, Matrix India

About Five Star:
Five Star is a small business finance company that provides secured loans to MSME customers. Five Star caters to customers such as small shop owners (provision stores, small restaurants, textile stores, bakery outlets, medical stores etc), small & medium machine shop operators, self employed people etc. Five Star also provides loans for the purpose of home improvement to MSME customers. Five Star has served more than 5,000 MSME customers and is present across 30 branches in Tamil Nadu. Five Star plans to further expand its footprint across different states in India. Further information is available at www.fivestarbcl.com

About Matrix Partners India:
Matrix Partners India is an investment firm with INR 3,000 crore under management. The firm invests in companies targeting the Indian consumer market at the seed, early and early growth stages. The firm has invested in several market leading companies including Muthoot Finance (gold loan NBFC), TreeHouse Education (preschools), Cloudnine (maternity and infant care chain), Mswipe (mobile POS), Verse/NewsHunt (vernacular mobile platform) and Quikr (online classifieds). Matrix Partners has a global network of funds investing in the US, China and India with US $3 billion under management. Further information is available at www.matrixpartners.in