The World Bank’s Board of Executive Directors has approved a loan of USD 200 million to be given to the Small Industries Development Bank of India (SIDBI) for lending to microfinance institutions (MFIs) in India. The funding is intended to “support operations and growth in MFIs, enhance their financial strength, and enable them to leverage private commercial funds to on-lend larger amounts to the under-served” [1].
The project, called “Sustainable and Responsible Microfinance Project for India,” will have a focus on initiatives such as the “establishment of a microfinance information platform and promotion of adherence to a code of conduct for MFIs, as well as for capacity building and monitoring.” The period of maturity for the loan is 25 years with a 14.5 year grace period, and no interest rate is listed for that period.
By Julia Korn, Research Associate
About The World Bank:
The World Bank Group consists of five closely associated institutions, all owned by member countries that carry ultimate decision-making power. Each institution plays a distinct role in the Group’s mission to fight poverty and improve living standards for people in the developing world. The World Bank Group encompasses the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID).
About The Small Industries Development Bank of India (SIDBI):
The Small Industries Development Bank of India (SIDBI) was established by the Indian Parliament in 1990. It provides credit to large- and medium-scale microfinance institutions (MFIs). SIDBI reports having facilitated total financial assistance equivalent to USD 397 million during the fiscal year ending March 2009. This amount has gone toward various ventures such as term loans, equity support, and capacity building grants to MFIs. SIDBI is listed on, but does not report data to, the MIX Market.
Sources and Additional Resources:
[1] The World Bank News and Broadcast: “India – Scaling Up Sustainable and Responsible Microfinance Project” http://web.worldbank.org/WBSITE/EXTERNAL/NEWS/0,,contentMDK:22599288~pag…
MicroCapital Universe: World Bank Group. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The…
MicroCapital Universe: The Small Industries Development Bank of India. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Sma…
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