Kotak Mahindra Bank Ltd partners with the USAID and DFC to facilitate financing for women-owned businesses.

In the midst of the pandemic, this collaboration will assist MSMEs in obtaining loans to rehabilitate and scale their enterprises.

Kotak Mahindra Bank Ltd (KMBL) through a US $50 million Loan Guaranty Program has partnered with, The United States Agency for International Development (USAID) and the U.S. International Development Finance Corporation (DFC) to support women entrepreneurs and Micro, Small, and Medium Enterprises in India.  

Kotak would make loans for on-lending to Non-Banking Financial Companies (NBFCs) in the MSME and Microfinance (MFI) areas under this programme.50% of the loans will be granted to women-led or women-managed MSMEs, or MSMEs that employ a specified percentage of women or create a good or service that disproportionately benefits women. More than 30,000 individual women borrowers and 7,500 MSME enterprises are expected to benefit from this.

The programme will be backed by Vivriti Capital, that will provide a US $1 million first-loss guarantee as well as substantial analytical and sourcing support through CredAvenue, a renowned loan platform. The DFC will provide KMBL with a pari passu assurance of up to 50% of the remaining uncovered line ($24.5 million), which will be funded by USAID.

D Kannan, Kotak Mahindra Bank’s Group President – Commercial Banking, stated, “Kotak Mahindra Bank is committed to the cause of fostering financial inclusion and making credit available from formal sources to MSMEs and women entrepreneurs belonging to lower socio-economic segments. These two segments have been impacted by the ongoing pandemic, and this program will provide credit and help women entrepreneurs and MSMEs to not only scale up their businesses, but also generate employment.”

According to Veena Reddy, Director of USAID’s India Mission, “At USAID, we believe gender equality and women’s empowerment are not just a part of development but are the core of development. Women in India have been disproportionately impacted by the COVID-19 pandemic, facing economic hardships that directly impact the livelihoods of their families and communities. USAID is happy to support this new initiative that will help facilitate access to the much-needed financial resources to women-owned businesses and entrepreneurs and help them reach their full potential.”

“Empowering women-owned MSMEs is critical to fostering inclusive growth in India, and will also help bolster India’s post-pandemic recovery,” said Algene Sajery, Vice President of the Office of External Affairs and Head of DFC’s Global Gender Equity Initiatives. “DFC is proud to support this program, which brings together key players in the Indian financial system to help amplify the reach and development impact of our loan guaranty.”

CredAvenue’s Chief Capital Markets Officer, Anita Ferreira, stated “We are proud to support this initiative to create a dedicated funding line targeted towards empowering women entrepreneurs and borrowers. CredAvenue’s ability to bring in the entire ecosystem for a large-scale programme such as this gives our partners a unique advantage.”