Cracking the banking Barrier: How Catalytic Capital scaled Green Lending in India
Mufin Green Finance Limited (Mufin) is India’s first publicly listed non-banking financial company (NBFC) dedicated to both green and non-green financing. Founded in 2016, Mufin was established to address a structural gap in India’s financial system: the exclusion of low-income, informal workers from access to capital, despite clear evidence that clean energy assets – particularly electric vehicles – can generate stable and sufficient incomes. Mufin serves nano-entrepreneurs such as e‑rickshaw drivers, delivery riders, and small transport operators, 84% of whom are first-time borrowers, by financing electric two-, three-, and four-wheelers, charging infrastructure, swappable batteries, and, more recently, solar energy solutions and Mediclaim Premium. By assessing creditworthiness using cash flows and asset economics rather than salary slips or traditional collateral, Mufin has demonstrated that climate-aligned lending and financial inclusion can be mutually reinforcing.
What distinguishes Mufin’s evolution is not only its growth, but the way that growth was enabled through a carefully sequenced use of catalytic capital to overcome systemic risk barriers. Early validation from impact investors and global green bond markets established institutional credibility, but mainstream commercial banks remained reluctant to lend at scale to a portfolio dominated by informal, first-time credit users. The turning point came in 2023, when a purpose-built de-risking mechanism, co-designed with Shell Foundation, absorbed initial credit risk and fundamentally shifted lender perceptions. This intervention unlocked large-scale domestic banking capital, catalysed rapid balance sheet growth, and repositioned Mufin from a specialist green lender to a nationally significant financial intermediary.
By 2026, Mufin had expanded Pan India with cumulative disbursements exceeding $387 million and assets under management (AUM) above $162 million. It had mobilised capital from India’s largest public banks, global development finance institutions, and public market investors, while remaining anchored to its original mission: enabling access to clean, income-generating assets for populations historically excluded from formal finance. Mufin’s trajectory offers a concrete demonstration of how targeted de-risking and catalytic capital can unlock markets, shift financial system norms, and accelerate the energy transition at scale.
Phase 1
Validation (2022–2023): Proving the Model
From its early operations, Mufin demonstrated that low‑income EV operators were creditworthy when assessed using alternative data – vehicle economics, cash flows, and usage patterns rather than salary slips or traditional collateral. What remained unproven was whether this model could scale institutionally within India’s regulated financial system.
To address this, Mufin, then known as APM Finvest and acquired by Hindon Mercantile, executed a strategic acquisition in 2022, gaining control of an already listed and Reserve Bank of India (RBI)‑regulated NBFC. This move compressed years of regulatory and capital‑market preparation into months, creating an investable platform purpose‑built for green lending.
That foundation enabled Mufin to raise more than $4.5 million in Series A equity from the Incofin India Progress Fund, followed by an $11.90 million internationally certified green bond arranged by Symbiotics and listed on the Luxembourg Green Exchange. Together, these transactions delivered two critical outcomes: domestic institutional credibility and international green certification.
By early 2023, Mufin had proven three things simultaneously: its borrowers repaid, its balance sheet was investable, and its assets met international ESG standards. AUM grew from $5 million to $27 million, but the ceiling on growth was becoming clear. It had reduced over 20,000 tonnes of carbon emissions through its financed fleet, and the three layers of trust that every subsequent phase would depend upon the regulated platform, the impact equity anchor, and the international green certification had been build, in sequence, exactly as planned. The remaining constraint was not equity or validation; it was affordable, large‑scale debt from mainstream Indian banks.
Phase 2
Scale (2023–2024): Unlocking Commercial Capital for scale
Despite strong performance data, Indian banks remained cautious. Lending to an NBFC whose entire portfolio consisted of first‑time credit EV operators still failed conventional risk tests. What banks needed was not more proof of concept, but explicit risk absorption.
To address this concern, Shell Foundation, in July 2023, disbursed INR50 million to Mufin to create, alongside Mufin’s own capital a First Loan Default Guarantee (FLDG). This facility sat ahead of Mufin’s loan portfolio, absorbing initial losses before senior lenders were exposed. The instrument fundamentally altered the risk‑return profile of lending to Mufin. This was not a subsidy to borrowers, nor balance sheet support to the company. It was a precision de‑risking mechanism designed to crowd in commercial capital at scale.
The market response was immediate. With the FLDG in place, Mufin raised more than $45 million in debt from over twenty lenders in 2023 alone. This included the institutions whose participation signalled, unmistakably, that EV lending to first‑time credit users had entered the financial mainstream. ICICI Bank, Kotak Mahindra, Northern Arc, and AU Small Finance Bank followed.
By December 2023, Mufin’s AUM had doubled to $50 million, operations had scaled nationally, and the long‑standing barrier between specialist green lenders and India’s core banking system had been definitively breached. At the centre of that shift was Shell Foundation’s de‑risking capital being the causal bridge between proof and scale. The capital unlocked by Shell Foundation’s contribution was structured to finance approximately 42,000 EVs for low-income clients, provide over 210 million rides to disadvantaged communities, and reduce more than 90,000 tonnes of CO2 emissions.
Phase 3
International Endorsement (2024–2026): From National to Global Credibility
With domestic banks now fully engaged, Mufin turned to long‑tenor international capital to match the life of EV and clean‑energy assets. This phase converted the credibility earned earlier into global DFI participation.
In December 2024, Mufin secured an $18 million ten‑year loan from the U.S. International Development Finance Corporation (DFC). This was followed by commitments from Developing World Markets and Finnfund. These institutions were not validating a concept; they were backing a proven, scaled intermediary capable of anchoring India’s EV transition over the long term.
Importantly, these DFIs cited the same features mainstream banks had initially resisted – first‑time borrowers and informal incomes as primary indicators of mission alignment, not risk. The signalling effect compounded: each international commitment reduced perceived risk for the next.
Phase 4
Institutionalisation (2025–2026): Building a Durable Listed NBFC
Durable Listed NBFC
By Phase 4, the focus shifted from ‘access to capital’ to ‘durability’. Mufin diversified its funding base through repeatable non‑convertible debenture (NCD) issuances and completed a $33 million preferential equity allotment with domestic institutional and family‑office investors.
Simultaneously, it expanded beyond EVs into rooftop solar, charging infrastructure, insurance premium financing, and salary‑linked credit – extending its inclusion model across energy and social resilience needs while maintaining underwriting discipline.
By early 2026, Mufin had become what few green‑finance institutions in emerging markets achieve: a publicly listed, multi‑product NBFC with a diversified capital stack and sustained commercial confidence. It has reached more than 230,000 borrowers, out of which 150,000 are of insurance premium.
Breakdown for Mufin financial and Impact journey
| S/N | Phase | Input | Output |
| 1 | Validation (2022 – 2023): Anchoring with Impact Capital | • $4.5m equity investment from Incofin India Progress Fund • $11.90m capital raise through green bond arranged by Symbiotics investments | • AUM grown from $5 – 27m • Reduced over 20,000 tonnes of carbon emissions |
| 2 | Scale (2023 – 2024): Activating the De-risking mechanism and cracking mainstream banking | • INR 50million investment provided by Shell Foundation | • $45m raised from more than 20 lenders including (, ICICI Bank, Kotak Mahindra investments, Northern ARC) • AUM reached $84m by December 2024 • $14m series B capital raise from Indian family offices • $5m foreign currency debt from Blue Orchard |
| 3 | International DFI Endorsement (2024 – 2026): Proving the model to the world | • $18m loan from USDFC | • $6.5m Non-convertible Debenture facility from DWM • $12m senior secured loan from Finnfund |
| 4 | Public Market Institutionalisation (2025 – 2026): Building a durable listed NBFC | • NCD issues that raised over $35m | • $33m preferential equity allotment from approximately 130 non-promoter investors participating • AUM exceeding $160m |