Swedfund, the Swedish development finance Institution, invests up to 25 MUSD in the form of a Senior Unsecured Loan to one of India’s leading microfinance institutions – CreditAccess Grameen Ltd. Through this investment, Swedfund emphasizes the support to financial inclusion in rural India when contributing to women’s economic empowerment.
India has been hit hard by Covid-19 leading to a halt in economic activity and a rise in poverty. The pandemic, and in particular subsequent lockdown measures predominantly in urban areas, have had an adverse impact on the Indian microfinance market.
Access to long-term funding is crucial to support continued lending to rural families for income generation, and this has increased the importance for institutions like Swedfund.
– Focusing solely on female customers, CreditAccess Grameen addresses women with their offerings in a way that is benefiting women and strengthening their economic empowerment, role and opportunities in society.
CEO of Swedfund, Maria Håkansson said: “In the wake of the pandemic the demand for income-generating loans is expected to be high, increasing the importance of microfinance institutions such as CreditAccess Grameen.”
Investing in CreditAccess Grameen is expected to support financial inclusion among underserved women in mainly rural India by providing them with access to income generating loans, e.g. used for starting a business, investing in machinery raising productivity or as working capital.
Alongside income generating loans, CreditAccess Grameen provides financial literacy training to customers which is expected to contribute to women’s economic empowerment and lasting impact in terms of improved income generation and gender equality.
Swedfund has conducted a virtual Due Diligence and is expected to contribute to strengthened employment practices in the microfinance sector and in general support the Company’s ESG capacity.
Chennai-based Northern Arc Capital, a debt investor and platform in the credit segment, advised Swedfund in the transaction. Credit Access Grameen is Swedfund’s second investment in Indian microfinance sector underpinning the strong impact case created by supporting rural female borrowers.