Mumbai, Feb 3 (PTI): Leading microfinance institution CreditAccess Grameen (CAG) announced on Monday that it will borrow $50 million from the International Finance Corporation (IFC) under the external commercial borrowing (ECB) route.
The funding aims to expand financial support to up to 40 lakh additional women borrowers, particularly those involved in agriculture and allied sectors, according to the company's statement.
As India's largest Non-Banking Financial Company-Micro Finance Institution (NBFC-MFI), CAG confirmed that it has received approval for the $50 million commitment from IFC, a member of the World Bank Group.
Boost for Microfinance Amid Sector Challenges
The announcement comes amid a challenging period for the microfinance sector, which has been grappling with lower collection rates and rising delinquencies. The fresh capital infusion from IFC is expected to bolster CAG’s financial stability and operational reach.CAG stated that the funding will strengthen its asset liability management, thanks to flexible repayment structures and a geographically diversified portfolio to hedge against market volatility.
Strategic Vision: Increasing Foreign Funding
Nilesh Dalvi, Chief Financial Officer of CAG, highlighted the company’s long-term financial strategy, aiming to source 25-30% of its funds from foreign investments while ensuring cost-effective borrowing by FY28."IFC's investment will enhance competitiveness in India's financial sector, and we look forward to supporting CreditAccess Grameen in the long run," said Wendy Werner, IFC’s Country Head for India and the Maldives.
The deal marks a significant step for CAG in scaling its microfinance operations and expanding access to credit for women entrepreneurs in rural India.
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