HDFC Bank said that it had received $500 million in loans for women who were microfinance borrowers from the International Finance Corp (IFC).
The bank stated that it will use IFC's funding for on-lending as microloans to self-help groups (SHGs) and joint liability groups (JLGs) participating in the Sustainable Livelihoods Initiative (SLI). The bank has a long history of lending to women.
As of December 31, 2023, non-banking financial companies, such as microfinance institutions and small finance banks, accounted for approximately 47 million clients and had an aggregate gross loan portfolio of $31.6 billion. These companies are major lenders to women who are seeking loans for income generation.
MFIs, however, have less resources, are more fragmented, and must pay more for funding. In this situation, women's access to microloans may be boosted, encouraging self-employment, by utilizing the wide distribution network of banks and reduced financing costs, among other advantages, according to HDFC Bank.
In the meanwhile, Fusion MFI announced on Friday that it and the US International Development Finance Corporation had signed a $25 million credit arrangement. The purpose of these funds is to expand Fusion MFI's commercial activities in India. Women MFI borrowers receive the majority of Fusion's loans.
