L&T Finance Teams Up with ADB for $125 Million Boost in Rural India
Newzdaddy Business Updates
In a significant move, L&T Finance, a top Non-Banking Financial Company in India, has joined hands with the Asian Development Bank (ADB) for a financing deal worth $125 million. The collaboration marks ADB’s first-ever loan to the L&T ecosystem, and the funds are earmarked to support financing in rural and peri-urban areas in India, with a special focus on women borrowers.
The financing package includes a $125 million loan from ADB, along with an agreement to gather an additional $125 million in co-financing from other development partners. Notably, 40 percent of the funds will be directed toward women borrowers, while the remaining portion will benefit farmers, Micro, Small, and Medium-sized Enterprises (MSMEs), and individuals seeking loans for new two-wheeled vehicles.
Sachin Joshi, Group Chief Financial Officer at L&T Finance, expressed enthusiasm about the collaboration, emphasizing its alignment with the company’s commitment to social responsibility. He stated that this long-term loan is a strategic move in diversifying funding sources and aims to bridge financial gaps, promoting inclusive economic growth across the country.
Despite steady growth in rural economies, many face challenges in accessing financial services. Marginal farmers, in particular, struggle, with 70 percent lacking bank accounts and 87 percent without access to credit. Women are disproportionately affected, with only 14 percent having access to credit.
The project focuses on key areas such as microloans, farm equipment loans, two-wheeled vehicle loans, and MSME loans, identifying them as segments with strong growth potential in the medium term. By concentrating on lending in underserved states, the initiative aligns with the goals of India’s Ministry of Rural Development.
Suzanne Gaboury, Director General of ADB’s Private Sector Operations Department, highlighted the significance of the partnership in supporting individual livelihoods and small businesses, particularly emphasizing reaching women borrowers in rural India. The collaboration is expected to make a positive impact on economic resilience in these communities.
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