IFC extends $500 million credit line to HDFC Bank for micro loans

International Finance Corporation (IFC) has extended a credit line worth $500 million to HDFC Bank to augment their rural microloans for underserved women in India, the private sector lender said in a statement.

Women, especially microloan borrowers in semi-urban and rural areas, will have increased access to finance on the back of the funding which is aimed to support lending for income generation purposes, fostering financial inclusion and socio-economic growth in the country.

The lender will use IFC’s financing for on-lending as microloans to Self-Help Groups (SHGs) and Joint Liability Groups (JLGs) enrolled in the Sustainable Livelihoods Initiative (SLI).

“As a bank, we have been committed to empowering women, especially by targeted lending to SHGs and JLGs, which further helps take banking to the underbanked and unbanked. This longer-duration credit facility from IFC will further boost these efforts,” said Arup Rakshit, Group Head, Treasury, HDFC Bank.

Presently, non-banking financial companies (NBFCs), including microfinance institutions (MFIs) and small finance banks, are the major lenders to women seeking loans for income generation purposes. They account for approximately 65.7 per cent of the total microfinance lending in India and collectively reach nearly 47 million clients with an aggregate gross loan portfolio of $31.6 billion as of December 31, 2023.

First Published: May 17 2024 | 9:17 PM IST