Microfinance firm CreditAccess Grameen Ltd has secured $20 million (around Rs 163.6 crore) in debt funding from a European development bank, marking its third loan that’s linked to meeting environmental, social and governance (ESG) parameters.
The microlender mopped up the capital as external commercial borrowings from Austria's Oesterreichische Entwicklungsbank AG (OeEB).
The capital infusion comes less than six months after the Bengaluru-based non-banking financial company raised $35 million in an ESG-linked loan from US International Development Finance Corporation (DFC). Previously, it had raised $25 million in ECB from Sweden’s development finance institution Swedfund International AB in July last year.
“The OeEB fundraise marks the third ESG-linked loan in our inclusive finance journey with $80 million raised so far,” said Udaya Kumar Hebbar, managing director and chief executive at CreditAccess Grameen.
The lender will deploy the fresh proceeds to provide micro loans to women borrowers from low-income households for income-generating activities, thereby promoting their access to formal financing, it said in a statement.
Besides the three ESG-linked loans, International Finance Corporation (IFC), the private-sector investment arm of the World Bank Group, had proposed to make a debt investment of up to $50 million in CreditAccess Grameen in May 2022.
The lender focuses on providing micro loans to women predominantly in rural areas across India. It had a gross loan portfolio of Rs 21,032 crore at the end of March 2023. It has presence in 344 districts in 14 states through its 1,782 branches
“We believe this will contribute to strengthening financial inclusion of poor and low-income households as well as towards promoting gender equality, in the rural areas of India,” said Sabine Gaber, member of OeEB’s executive board.