L&T Finance Holdings has inked a financing pact with Japan International Cooperation Agency (JICA) worth $125 million to support financing in rural and peri-urban areas in India, particularly with respect to women borrowers.
Last November, L&T Finance Holdings sourced $125 million loan from Asian Development Bank (ADB), and as part of the co-financing agreement, an additional $125 million loan is now being raised from JICA. At least 40 percent 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 on the agreement, Sachin Joshi, Chief Financial Officer, L&T Finance Holdings said, “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.”
JICA in their statement mentioned, “Rural India, is home to about 65 percent of the country’s population and widely supports the Indian economy, sustaining about 46 percent 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.”