Two American institutions have jointly sponsored a $50 million (about Rs 372 crore) loan guarantee for Indian women and small business borrowers by tying up with private sector lender Kotak Mahindra Bank.
This is a loan portfolio guarantee to Kotak Mahindra Bank (KMB) by the United States Agency for International Development (USAID) and the US International Development Finance Corporation (DFC) to support increased access to finance for women borrowers, and micro, small and medium enterprises (MSMEs) across India, as per a statement.
It explained that KMB will be providing loans for onlending to non-bank lenders operating in the MSME and microlending space. The programme is likely to benefit 30,000 women borrowers and 7,500 MSMEs.
At least half of the loans are earmarked to be given to women-led or women-managed MSMEs, or MSMEs that employ a certain percentage of women or that produce a good or service that disproportionately benefits women, it said.
The program will be supported by Chennai-based NBFC Vivriti Capital, which will provide a $1 million first loss guarantee, and also extensive analytical and sourcing support through debt platform Credavenue, it said.
DFC will provide KMB with a 'pari passu' guarantee, which is financially sponsored by USAID, of up to 50 per cent of the remaining $24.5 million line.
KMB's Group President D Kannan said the initiative will help credit available from formal sources to MSMEs and women entrepreneurs belonging to lower socio-economic segments.
"These two segments have been impacted by the ongoing pandemic, and this program will provide credit and help women entrepreneurs and MSMEs to not only scale up their businesses, but also generate employment," he added.
"At USAID, we believe gender equality and women's empowerment are not just a part of development but are the core of development.
"Women in India have been disproportionately impacted by the COVID-19 pandemic, facing economic hardships that directly impact the livelihoods of their families and communities," USAID India's Mission Director Veena Reddy said.
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