The United States Agency for International Development (USAID) and the U.S. International Development Finance Corporation (DFC) announced on Friday that they are jointly sponsoring a $50 million loan portfolio guarantee to Kotak Mahindra Bank (KMBL) to support increased access to finance for women borrowers and micro, small and medium enterprises (MSMEs) across India.
Under this programme, KMBL will provide loans for on-lending to Non-Banking Financial Companies (NBFCs) operating in the MSME and Microfinance (MFI) space. This will help provide credit to end borrowers to promote sustained and inclusive economic growth.
This programme could play a crucial role in women’s economic empowerment as at least 50% of the loans are earmarked to be lent 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 is likely to benefit more than 30,000 individual women borrowers and 7,500 MSME firms.
According to Veena Reddy, USAID/India Mission Director, women in India have been disproportionately impacted by the COVID-19 pandemic. She added, “USAID is happy to support this new initiative that will help facilitate access to the much-needed financial resources to women-owned businesses and entrepreneurs and help them reach their full potential.”
“MSMEs and women entrepreneurs have been impacted by the ongoing pandemic, and this programme will provide credit and help to them to not only scale up their businesses, but also generate employment,” said D. Kannan, group president – commercial banking, KMBL.
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