CreditAccess Grameen Limited, a Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI), has signed a historic syndicated social loan facility of up to USD 200 million, qualifying as ECB under the automatic route of the RBI, the company announced through an exchange filing.
The Company has received USD 160 million in commitments to date, along with a green-shoe option to raise an additional USD 40 million, exercisable over 120 days from the date of signing of the facility agreement. The Company has currently drawn USD 100 million, and the remaining commitments shall be drawn over the coming months.
This marks the first social ECB loan in the Indian microfinance industry and the fourth from India. The social loan shall abide by CA Grameen’s Social Loan Framework which aligns with the Social Loan Principles 2023, stipulating the use of proceeds, social development goals and governance, according to the Loan Market Association. Sustainalytics has provided a second-party opinion on CA Grameen’s Social Loan Framework, considering it credible and impactful.
Standard Chartered Bank is the Social Loan Coordinator for this transaction along with being the sole Mandated Lead Arranger and sole Bookrunner. Standard Chartered Bank initially launched the transaction for USD 100 million, however, given the overwhelming response to this Indian Social Loan proposition, CA Grameen and Standard Chartered Bank decided to upsize the facility up to USD 200 million.
The USD 160 million commitments have been received from 12 banks, including a contribution of 25% from Taiwanese Banks, 28% from Middle Eastern Banks along with the lead arranger, and the rest from foreign branches of Indian Banks.
Commenting on the achievement, Mr. Balakrishna Kamath, Chief Financial Officer, CreditAccess Grameen, said, “The social loan facility marks the single largest foreign borrowing transaction in our journey. Our consistent performance track record, strong asset quality, and best-in-class operating profitability helped us to receive an overwhelming response from many global banks who have taken a maiden exposure to the Indian microfinance industry through this transaction. Being the largest NBFC-MFI, the strength and scalability of the liability profile is paramount in our pursuit of consciously growing our loan portfolio at 20-25% CAGR to cross the INR 50,000 crore mark in the coming four to five years. We have been successful in increasing the share of long-term funds and expanding our borrowing base across domestic and foreign markets. Our socially relevant business and strong ESG compliance make a strong case for us to target ESG-linked funds from global institutions in the coming years.”
