A $125 million financing agreement between L&T Finance and the Asian Development Bank (ADB) will support financing in India’s rural and periurban areas, especially for women borrowers.
The financial support comes in the form of an ADB loan with a maximum value of $125 million and a pledge to arrange another $125 million in co-financing from different development partners. at least forty percent of the money goes towards helping female borrowers; the rest is allocated to loans for new two-wheeled vehicles, farmers, and Micro, Small, and Medium-sized Enterprises (MSMEs).
This partnership with ADB is consistent with our basic principles of social responsibility. This collaboration with ADB, in our opinion, is a big step forward that will strengthen our current initiatives to close the financial gap and advance equitable economic growth nationwide. This long-term loan is a component of our ongoing plan to diversify our sources of funding for our company. We at L&T Finance are aware of the profound effects financial inclusion has on the communities we work with. Additionally, we aim to be a catalyst for the empowerment of people, particularly women, farmers, and MSMEs, and to promote economic resilience through our on-lending activities in India’s underserved and underperforming states “said Sachinn Joshi, Group Chief Financial Officer, L&T Finance.
Even though the economy of rural areas has been growing steadily, getting access to financial services is still very difficult for these communities. Roughly 70% of marginal farmers do not have a bank account, and 87% do not have the resources to obtain credit. Remarkably, women suffer disproportionately from this; only 14% of them have access to credit.
The segments of microloans, farm equipment loans, two-wheeled vehicle loans, and MSME loans are significant because they have been identified as having significant growth potential in the medium term. The project, which focuses on lending in rural and peri-urban areas of the nation’s underdeveloped states, strategically aligns with the goals of India’s Ministry of Rural Development.
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