TPG’s The Rise Fund Leads $140M Series C Round In China’s CFPA Microfinance

CFPA Microfinance Management, a rural microfinance provider, today announced that it has raised nearly RMB1 billion (US$140 million) in series C equity financing led by The Rise Fund, a global impact investing fund managed by private equity group TPG Growth.

The latest round adds The Rise Fund to CFPA Microfinance’s list of big existing investors including Ant Financial, China Foundation for Poverty Alleviation, IFC, Sequoia Capital China, High Impact Capital Advisors and Renda Puhui.

Founded in 1996 by the China Foundation for Poverty Alleviation, Beijing-based CFPA offers microfinance services to poverty-stricken populations in rural areas for productions and consumption.

"As one of the few profitable national micro-finance platforms focus on rural populations, we see a strong collinearity between commercial success and impact in CFPA Microfinance, which is fully in line with the Rise Fund’s investment strategy," said Chang Sun, managing partner of TPG China.

At present, its microlending reaches more than 380,000 customers in 91,000 villages across China, with 22% year-over-year growth in net revenue and more than 3,000 on-the-ground staff sourcing and reviewing loans.

China is home to one of the largest unbanked populations in the world. Nearly 500 million people across rural China are served by neither traditional banking systems nor non-bank institutions, according to the announcement.

"Given that the vast majority of CFPA Microfinance’s customers come from China’s poorest communities, the impact of these micro loans can be transformative, giving people the ability to improve productivity and generate saving for the future or invest in crucial services for their families, like education and healthcare, that lead to long-term economic gains," said Chang.

CFPA will use the proceeds for technology innovation, operation upgrade and coverage expansion to bring inclusive finances to population with diversified and enhanced service offering to rural market.

The Rise Fund is a US$2 billion global fund managed by TPG Growth, the global growth equity and middle market buyout platform of alternative asset firm TPG. It is committed to achieving measurable, positive social and environmental outcomes alongside competitive financial returns.

The fund’s first investment in China was leading an investor group to buy a majority stake in Baidu Financial Services Group in May 2018.