HSBC India will expand its lending to microfinance institutions and non-bank finance companies, with ADB will partially guarantee the loans. About 4 lakh borrowers can be supported through this initiative, HSBC said.
“This will expand HSBC India’s risk appetite and deployed capital, helping to enhance private sector financing and improve financial inclusion in India,” the bank said in a release.
This is ADB’s first partnership with HSBC India. Under the agreement, a total financial support of an equivalent of $30 million will be disbursed to three local MFIs by April 2022.
The partial-guarantee arrangement will help MFIs to access funding for on-lending activities as they expand operations after the pandemic.
“Microfinance in India has had a massive impact on people’s lives as they struggled to cope with the global pandemic and has a further critical role to play as we slowly emerge from it,” HSBC India’s head for commercial banking said Rajat Verma was quoted as saying in a statement issued by the bank.