PremiumNEW DELHI: The US Agency for International Development (USAID) and the US International Development Finance Corporation (DFC) on Friday said they would jointly sponsor a $50 million loan portfolio guarantee to Kotak Mahindra Bank to support increased financial access to women borrowers, and micro, small and medium enterprises (MSMEs) in India.
This comes against the backdrop of the covid-19 pandemic, a statement from the US embassy said adding that the partnership will help MSMEs impacted by the pandemic to easily access loans to rebuild and scale up their businesses.
Under the program, Kotak Mahindra Bank will provide loans to Non-Banking Financial Companies (NBFCs) operating in the MSME and Microfinance (MFI) space, the statement said.
“This will help provide much-needed credit to end borrowers and will promote sustained and inclusive economic growth. This program will 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 said.
The scheme is expected to benefit more than 30,000 individual women borrowers and 7,500 MSME firms.
The program will be supported by the Chennai-based NBFC, Vivriti Capital, which will provide a $1 million first loss guarantee, as well as extensive analytical and sourcing support through leading debt platform CredAvenue, the US statement said.
“Kotak Mahindra Bank is committed to the cause of fostering financial inclusion and making credit available from formal sources to MSMEs and women entrepreneurs belonging to lower socio-economic segments," D Kannan, Group President – Commercial Banking, Kotak Mahindra Bank was quoted as saying by the statement.
“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 said.
USAID’s India Mission Director Veena Reddy said that “gender equality and women’s empowerment are not just a part of development but are the core of development."
