ADB and Shriram Finance Sign Deal to Boost MSME and EV Financing in India

A
|
News
|24 March 2025Social icon button for XSocial icon button for LinkedInSocial icon button for Facebook
The Asian Development Bank (ADB) and Shriram Finance Limited have entered into a significant loan agreement amounting to $150 million. This initiative aims to enhance access to finance for micro, small, and medium-sized enterprises (MSMEs) in India, with a particular focus on business loans and financing for electric vehicles (EVs) and low-emission commercial vehicles.

The loan is designed to particularly benefit women-owned MSMEs and those in economically lagging states. This transaction is part of a larger $306 million financing package led by ADB, which includes contributions from the Japan International Cooperation Agency and the Export-Import Bank of India.

Empowering Women Entrepreneurs

MSMEs are crucial to India's economy, contributing 30% to the GDP and employing over 123 million people. However, they face significant challenges in accessing formal credit, with only a quarter of the market being served by financial institutions. Women entrepreneurs encounter additional barriers due to social norms and limited access to collateral. The ADB loan aims to bridge this gap by enhancing Shriram Finance's ability to provide tailored financial solutions to MSMEs, particularly in rural and semi-urban areas.

Environmental Goals and Sustainable Development

The ADB loan also supports India's government initiatives to reduce air pollution through the adoption of EVs and low-emission vehicles. The government's EV30@30 initiative targets 30% of all new vehicle sales to be electric by 2030. This aligns with ADB's commitment to supporting sustainable development and financial inclusion in India.

Shriram Finance's Role in the Economy

Shriram Finance Limited, a flagship company of the Shriram Group, is one of India's largest non-banking financial companies specializing in commercial vehicle financing and MSME lending. With a vast network of branches and employees, Shriram Finance is well-positioned to support underserved MSMEs and promote the adoption of electric and low-emission vehicles.

For more information, visit the ADB website.