CreditAccess Grameen raises $35 mn ESG loan from US International Development Finance Corp

MUMBAI: Microlender CreditAccess Grameen Ltd on Wednesday said it has signed an agreement with US International Development Finance Corp. (DFC), the US government’s development finance institution, for a $35 million ESG-linked loan for up to seven years through the external commercial borrowing (ECB) route.

The direct loan, CreditAccess said, is one of the first of its kind for DFC to a non-banking financial company microfinance institution (NBFC-MFI) in India. This reflects the increased confidence and commitment shown by international investors, financial institutions, and foreign governments in the long-term growth prospects of India’s microfinance industry, it said in a statement. The loan facility will also focus on performance targets linked to ESG principles to strengthen women’s entrepreneurship and leadership.

The transaction marks the second ESG-linked loan for CA Grameen.

Udaya Kumar Hebbar, managing director and chief executive, CreditAccess Grameen, said that the, “Indian microfinance industry, being a global leader, has all the building blocks required to grow sustainably and is well-placed on the ESG front.”

“The long-term foreign borrowings strengthen our liability strategy by diversifying our geographical risk as well as achieving a stronger asset-liability position to delivering sustainable growth over the longer term,” said Hebbar.