At least 40 per cent of the proceeds will be allocated to women borrowers, while the rest will support farmers, micro, small, and medium-sized enterprises (MSMEs)
The Asian Development Bank (ADB) has signed a $125 million loan agreement with L&T Finance to support financing in rural and peri-urban areas in India, particularly for women borrowers.
The funding comprises a loan of up to $125 million from ADB, and an agreement to syndicate an additional $125 million co-financing from other development partners. At least 40 per cent of the proceeds will be allocated for women borrowers, while the rest will support farmers, micro, small, and medium-sized enterprises (MSMEs), and loans to purchase new two-wheeled vehicles.
“Rural India, with 65 per cent of the country’s population engaged in agriculture, contributes almost half of the national income,” said Suzanne Gaboury, ADB Director General for Private Sector Operations. “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.”
Despite steady rural economic growth, rural communities face significant barriers to accessing financial services. About 70 per cent of marginal farmers do not have a bank account and 87 per cent lack access to credit. Women are disproportionately affected, with only 14 per cent having access to credit.
Microloans, farm equipment loans, two-wheeled vehicle loans, and MSME loans have been identified as segments with strong growth potential anticipated in the medium term. By focusing on lending in rural and peri-urban areas of lagging states in India, the project is strategically aligned with the goals of India’s Ministry of Rural Development.
