Home » ADB, HSBC tie up to set up $ 100 M partial guarantee programme for MFI.

What is the news :

The Asian Development Bank (ADB) and HSBC Indiahave signed an agreement to establish a $100 million partial guarantee program to support more than 0.4 million micro-borrowers, especially women running small businesses.

About the Agreement :

The agreement will provide financing of an equivalent of $30 million that will be initially disbursed to three micro finance institutions (MFIs) in India by April 2022.
The partial guarantee arrangement will help MFIs to access funding for on-lending activities as they expand operations after the coronavirus pandemic.
ADB, a Manila-based multilateral funding agency, in a statement said HSBC will expand its lending to microfinance institutions (MFIs) and non-bank finance companies, with ADB partially guaranteeing the loans.
This will expand HSBC’s risk appetite and deployed capital, helping to enhance private sector financing and improve financial inclusion in India. It is ADB’s first partnership with HSBC.
MFIs have emerged as lifelines for underserved clients such as low-income households and small businesses as they struggled to access finance during the pandemic.

What is microfinance :

Microfinance is a banking service provided to unemployed or low-income individuals or groups who otherwise would have no other access to financial services. Microfinance allows people to take on reasonable small business loans safely, and in a manner that is consistent with ethical lending practices.

Microfinance in india :

Microfinance in India has had a massive impact on people’s lives as they struggled to cope with the global pandemic.
It plays a critical role in enabling financial inclusion and ensuring last-mile delivery of microcredit.
ADB’s Microfinance Program was launched in 2010 and has provided more than $1.8 billion in loans and helped mobilize $881 million in co-financing. It has provided access to microloans for more than eight million borrowers, 98 per cent of them women.

About ADB:

Recent news about ADB :

Asian Development Bank lends record $ 4.6-bn loans to India in 2021

The Asian Development Bank (ADB) said it provided a record USD 4.6 billion loans to India in 2021, including USD 1.8 billion towards coronavirus response.
“The Asian Development Bank committed a record USD 4.6 billion in sovereign lending to India in 2021 for 17 loans, including USD 1.8 billion for the country’s coronavirus disease (COVID-19) pandemic response,” the multilateral funding agency said in a statement.
Of the COVID-19-related assistance, USD 1.5 billion was towards vaccine procurement and USD 300 million to strengthen primary health care in urban areas and the country’s future pandemic preparedness.
The ADB’s regular funding programme to India is made to support transport, urban development, finance, agriculture, and skills building.

ADB, HSBC tie up to set up $ 100 M partial guarantee programme for MFI.