IFC Partners with HDFC Bank to Expand Microloan Access for Underserved Women
The International Finance Corporation (IFC) has extended a credit line of $500 million to HDFC Bank to enhance rural microloans for underserved women across India. This collaboration aims to empower women, particularly microloan borrowers in semi-urban and rural areas, by increasing their access to finance for income generation activities. Here’s a detailed overview of the initiative:
Key Highlights
- Enhanced Access to Finance:
- The funding from IFC will enable HDFC Bank to provide increased access to finance for women in semi-urban and rural areas.
- The focus is on supporting lending for income generation purposes, thereby fostering financial inclusion and socio-economic growth.
- Utilization of Funds:
- HDFC Bank plans to utilize 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).
- This targeted approach ensures that the funds are directed towards empowering grassroots communities and promoting sustainable livelihoods.
- Commitment to Empowerment:
- Arup Rakshit, Group Head of Treasury at HDFC Bank, expressed the bank’s commitment to empowering women through targeted lending to SHGs and JLGs.
- The partnership with IFC strengthens these efforts and reinforces the bank’s dedication to reaching the underbanked and unbanked segments of society.
- Current Landscape:
- Presently, non-banking financial companies (NBFCs), including microfinance institutions (MFIs) and small finance banks, play a significant role in lending to women for income generation purposes.
- They collectively reach nearly 47 million clients with an aggregate gross loan portfolio of $31.6 billion, accounting for approximately 65.7% of total microfinance lending in India as of December 31, 2023.
Conclusion
The collaboration between IFC and HDFC Bank represents a significant step towards promoting financial inclusion and empowering underserved women in India. By expanding access to microloans and supporting income-generating activities in rural and semi-urban areas, this partnership contributes to socio-economic development and sustainable livelihoods.
