ADB offers loan to boost Indian MSMEs, EV sector

The Asian Development Bank (ADB) and SK Finance Limited have signed a $100 million loan agreement to support women-owned micro, small, and medium-sized businesses and finance electric vehicles in India.

SK Finance is a top nonbank financial company in the country, specialising in vehicle and MSME loans. ADB’s support, provided in two instalments, will enhance the company’s ability to meet increasing credit needs.

ADB will allocate 20 per cent of its $100 million financing for electric vehicle (EV) projects and the remaining 80 per cent for on-lending to micro, small, and medium-sized enterprises (MSMEs), with a focus on women-owned or operated businesses.

“ADB is committed to promoting financial inclusion and supporting India’s ambitious climate goals,” said ADB Director General for Private Sector Operations Suzanne Gaboury.

This project supports ADB’s strategic goals by increasing financial access for underserved groups, particularly women entrepreneurs, and promoting the shift to electric mobility in the country. It will help reduce carbon emissions and enhance air quality.

MSMEs in India employ over 110 million workers, contributing significantly to the economy. However, access to finance, particularly for women-owned businesses, remains a major challenge, with an estimated annual financing gap exceeding $1 trillion.

Attribution: The Asian Development Bank report

Subediting: M. S. Salama