L&T Finance Holdings Ltd. (LTFH), a Non-Banking Financial Company, announced on March 12th that it has entered into a financing agreement with the Japan International Cooperation Agency (JICA) for $125 million. This funding aims to support lending activities in rural and peri-urban areas of India, with a specific focus on empowering women borrowers.
As per L&T Finance’s press release, in November 2023, LTFH secured a $125 million loan from the Asian Development Bank (ADB). Under the co-financing arrangement, an additional $125 million loan is now being procured from JICA.
Sachin Joshi, the Chief Financial Officer of LTFH, commented, “We consider this collaboration a significant stride towards narrowing the financial divide and promoting inclusive economic growth nationwide through loans geared towards sustainability. This long-term financing also aligns with our ongoing strategy of diversifying funding channels for the Company. By concentrating on lending in rural and peri-urban areas, particularly in underdeveloped states, our initiative strategically corresponds with the objectives of India’s Ministry of Rural Development.”
The Mumbai-based NBFC emphasized that a minimum of 40 percent of the funds will be earmarked for women borrowers, while the remainder will be allocated to support farmers, MSMEs, and loans for the purchase of new two-wheeler vehicles, including electric ones. However, JICA, in their official statement, stated, “Rural India, home to approximately 65 percent of the country’s populace, plays a crucial role in driving the Indian economy, contributing around 46 percent to the national GDP. Approximately 90 percent of India’s impoverished population resides in rural areas, where income growth rates have dwindled further, particularly post-COVID-19, exacerbating the urgency of poverty alleviation efforts. We believe that this partnership will help address rural disparities and bolster the nation’s economic progress by leveraging LTFH’s extensive network of branch offices.”
