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L&T Finance Holdings Ltd (LTFH) has signed a financing pact with Japan International Cooperation Agency (JICA) for $125 million to support financing in rural and peri-urban areas in India, particularly women borrowers.
Last November, LTFH had sourced $125-million loan from Asian Development Bank (ADB), and as part of the co-financing agreement, additional $125-million loan is now being raised from JICA, the non-banking financial company said in a statement.
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, it added.
Sachinn Joshi, Chief Financial Officer, LTFH, 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.”
Access to credit
Apurva Rathod, Company Secretary and Chief Sustainability Officer, LTFH, noted that 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. 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.” she said.
JICA, in their statement, said: “About 90 per cent 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.”
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