Mumbai, March 13, 2024: L&T Finance Holdings Ltd has signed a pact with Japan International Cooperation Agency for USD 125 million to support financing in rural and peri-urban areas in India, particularly women borrowers.
In November last year, LTFH had sourced USD 125 million loan from the Asian Development Bank (ADB), and as part of the co-financing agreement, additional USD 125 million loan is now being raised from JICA. At least 40 per cent of the proceeds will be allocated for women borrowers, while the rest will be allocated to support farmers, MSMEs, as well as loans to purchase new two-wheeler vehicles including electric two-wheelers.
Commenting at the signing ceremony held here on Tuesday, Sachinn Joshi, Chief Financial Officer, LTFH said, “Our collaboration with JICA resonates deeply with our commitment to driving sustainability and positive business impact. We view this partnership as a substantial step towards bridging the financial gap and fostering inclusive economic growth nationwide through sustainability focused loans. This long-term loan also helps us take forward our ongoing strategy of diversifying funding sources for the Company. By concentrating on lending in rural and peri-urban areas of lagging states, our project strategically aligns with the goals of India’s Ministry of Rural Development.”
Apurva Rathod, Company Secretary & Chief Sustainability Officer, LTFH said, “Despite steady rural economic growth, accessing financial services remains a challenge for rural communities. A large percentage of marginal farmers lack formal access to credit, with women being disproportionately affected. We understand the profound impact of financial inclusion on the communities we serve. Hence, through our lending activities particularly in underserved regions and lagging states, we aim to empower individuals, especially women, farmers, and MSMEs, thereby enhancing economic resilience.”
JICA in a statement said, “Rural India, is home to about 65 per cent of country’s population and widely supports the Indian economy, sustaining about 46 per cent of the national GDP. About 90 percent of India’s impoverished population resides in the rural area, where the income growth rate has decreased further, especially post COVID-19, making poverty reduction a pressing issue. We at JICA believe that this association will help in addressing rural disparities and sustain economic development of the country by leveraging LTFH strengths of nationwide branch office network. LTFH lending activities in the lagging states will further contribute to Sustainable Development Goals (SDGs) Goal 1 (No Poverty), Goal 5 (Gender Equality), Goal 8 (Decent work and economic growth) and Goal 17 (Partnerships for the goal).”
L&T Finance Holdings Ltd is a leading Non-Banking Financial Company (NBFC), which offers a range of financial products and services under the L&T Finance brand.
JICA is a government agency mandated to implement technical cooperation. It also provides technical support to grant aid and bilateral loans through the conduct of technical feasibility studies.
