What is the future of nbfcs

The project aims to reduce the large funding gaps for the microfinance and small business sector in the Indian financial system and thus to make a contribution to increasing incomes and securing and creating jobs for poorer sections of the population (overarching development policy goal).
The project consists of two components. Component 1 provides refinancing for microfinance institutions to expand the range of microloans up to INR 50,000 (approx. EUR 625) in the underserved Indian states based on the principles of responsible finance. The target group are the poorer sections of the population in rural and urban areas outside the south, especially women.
Component 2 refinances non-banking finance companies (NBFC) and banks nationwide that provide micro-enterprises with loans in excess of INR 50,000. Due to their informal status, unavailable collateral and lack of financial data, small business owners have very limited access to needs-based finance.
The aim of the FC module is to achieve sustainable use of the expanded financing offer by the target groups. The aim is to better exploit the productive potential of the Indian lower class, from income-generating activities of poor households to more employment-intensive activities of self-employed small businesses.
The project consists of a low-interest loan of EUR 50 million to the Small Industries Development Bank of India (SIDBI). At the same time, the capacities of selected microfinance institutions are being strengthened as part of technical support measures.

Country / Region / InstitutionIndia
number30441
main emphasisEconomy and financial sector
sector24040 - Informal and semi-formal financial intermediaries
Financial instrumentDevelopment loan
Other donors -
German financial contributionEUR 50.14 million
statuscompleted
ClientBMZ
Project partner SMALL INDUSTRIES DEVELOPMENT BANK OF INDIA (SIDBI)
Responsible departmentSouth asia