DMI Finance raises $47 mn from Sumitomo Mitsui Trust Bank, others

Non-banking lender DMI Finance has raised USD 47 million in equity investment led by new investor Japanese financial powerhouse Sumitomo Mitsui Trust Bank and existing investors New Investment Solutions and NXC Corporation, taking its overall equity base to USD 500 million now.

The Delhi-based DMI Finance, which has been in operations since 2009, serves over 6 million customers and offers personal loans, lines of credit, buy-now-pay-you-later credit, trade financing, and small business loans. It also offers housing finance, wholesale finance, and asset management, it said in a statement on Tuesday. The NBFC did not share more details about the funding such as equity dilution or how much the Japanese lender has invested.

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Sumitomo Mitsui Trust Bank is the largest trust bank in Japan since 1925 with USD 1.95 trillion in custody assets and USD 760 billion in assets under management. The trust bank provides a range of services in commercial bank business, asset management and administration, and disposal of assets, with trustee business such as pension trusts and investment trusts, and complementary businesses such as real estate brokerage and stock transfer agency services.

Japanese trust banks are financial institutions which offer a wide variety of investment related services and banking services to both corporate and individual customers. Trust banks have access not only to the traditional market of indirect financing but also to the expanding direct financing market. Such banks enable its customers do transactions among one another, wherein the bank takes up the role of trustee during such transactions and help customers transfer assets to another customer in accordance with the trust agreement terms and conditions.

Stated differently, a trust bank is a bank that helps in transferring of assets among customers through the means of formal contracts known as trust wherein the customer who transfers their assets is termed as the settler and the customer who accepts the assets from settler is the beneficiary. The role of the trustee is to monitor and administer the asset transfer on behalf of its customers. The concept of trust banks first emerged in Japan when in 1905 Tokyo established its first secured bond trust system by enacting the secured bond trust act.