L&T Finance signed a financing pact with Asian Development Bank (ADB) for USD 125 million to support financing in rural and peri-urban areas in India especially for women borrowers.
The financial support consists of a loan amounting to a maximum of $125 million provided by ADB, along with a commitment to coordinate an additional $125 million in co-financing from various other development partners. A minimum of 40 percent of the funds is designated for female borrowers, while the remaining portion will be used to help farmers, Micro, Small and Medium Enterprises (MSME), and loans for the acquisition of new two-wheelers.
“This collaboration with ADB is consistent with our core values of social responsibility. We believe that this partnership with ADB is a significant step and will accelerate our ongoing efforts to bridge the financing gap and promote inclusive economic growth across the country. For our Company, this this long-term loan forms part of our continuous strategy to diversify our funding sources. At L&T Finance, we recognize the profound impact that financial inclusion has on the communities we serve. And, through our lending activities in the underserved and backward states in India, we aim to be a catalyst to empower individuals especially the women, farmers and MSMEs thereby fostering economic resilience,” said Sachinn Joshi, Group Chief Financial Officer, L&T Finance.
Despite the consistent economic growth in rural areas, accessing financial services remains a significant challenge for rural communities. About 70 percent of marginal farmers do not have a bank account, and 87 percent lack the means to access credit. In particular, women are disproportionately affected, with only 14 percent having access to credit.
Identified as segments with great growth potential in the medium term, microloans, farm equipment loans, two-wheeler loans and MSME loans play a crucial role. The project is strategically aligned with the objectives of India’s Ministry of Rural Development by focusing on lending in rural and peri-urban areas of underdeveloped states in the country.
“Rural India, with 65 percent of the country’s population engaged in agriculture, contributes almost half of the national income. This partnership with L&T Finance, which has the capacity to provide credit at scale, allows ADB to support individual livelihoods and small businesses, with a specific focus on reaching women borrowers,” said Suzanne Gaboury, Director General, Private Sector Operations Department, ADB.
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Updated: 23 Nov 2023, 23:03 IST
(tagsTo Translate)L&T Finance