Microfinance firm CreditAccess Grameen Ltd, has raised $35 million (around Rs 280 crore) in ESG (environmental, social and governance)-linked loan for up to seven years through the external commercial borrowings (ECB) route from the US International Development Finance Corporation (DFC), the company said on Wednesday.
The company, on Monday, signed a loan agreement DFC, America’s development finance institution.
CreditAccess Grameen said its loan facility will also focus on performance targets linked to ESG principles to strengthen women’s entrepreneurship and leadership.
The transaction marks the second ESG-linked loan for CreditAccess Grameen. In July last year, the Bengaluru-based company raised $25 million (Rs 187 crore) in external commercial borrowings (ECB) from Sweden’s development finance institution Swedfund International AB, VCCircle reported.
The loan facility will focus on performance targets linked to ESG principles to strengthen women’s entrepreneurship and leadership, it had stated.
Over the past two decades, CA Grameen has focused on improving its presence in deep rural regions by grooming and financially supporting a class of women entrepreneurs and transforming communities across multiple macroeconomic cycles, it noted.
“The Indian microfinance industry, being the global leader, has all the building blocks required to grow sustainably and is well placed on the ESG front,” said Udaya Kumar Hebbar, Managing Director and Chief Executive Officer, CreditAccess Grameen Ltd.
He added, “The long-term foreign borrowings strengthen our liability strategy by diversifying our geographical risk as well as achieving a stronger asset-liability position to deliver sustainable growth over the longer term.”
CreditAccess Grameen Limited operates in 332 districts in 14 states (Karnataka, Maharashtra, Tamil Nadu, Chhattisgarh, Madhya Pradesh, Odisha, Kerala, Goa, Gujarat, Rajasthan, Uttar Pradesh, Bihar, Jharkhand, and West Bengal) and one union territory (Puducherry) in India through 1,681 branches.
The company’s consolidated Q4FY22 net profit nearly tripled to Rs 160 crore versus Rs 56.3 crore year-on-year while its net interest income and pre-provisioning operational profit showed a rise of 12.1% year-on-year, at Rs 520 crore and Rs 368.8 crore respectively. The microfinance lender’s gross loan portfolio and disbursements for the final quarter of FY22 were also up more than 22% year-on-year.
