Press Releases

On March 27, the Japan International Cooperation Agency (JICA) signed a 10 billion yen loan agreement with Indian Non-Banking Financial Company, Mahindra & Mahindra Financial Services Limited (Mahindra Finance) to help provide funds to micro-entrepreneurs and small and medium-sized enterprises (SMEs) through Private Sector Investment and Fiannce. Mahindra Finance shall lend an equivalent amount in low-income and special category states. This loan will be provided through co-financing with the Sumitomo Mitsui Banking Corporation (SMBC) based on the Facility for Accelerating Financial Inclusion in Asia (announced March 27, 2020).

SMEs in India play a vital role in the country’s economy. They make up 31 percent of the gross domestic product and 45 percent of exports, employing 124 million people (approximately 10 percent of the population). On the other hand, SMEs have limited access to finances, with a large financing gap of $397.5 billion (approximately 15 percent of GDP), 25 percent of which is found in low-income and special category states.

Established in 1991, Mahindra Finance is the subsidiary of Mahindra & Mahindra Limited, India’s one of the largest automobile companies. It has presence in 1,326 locations across India as a way to expand financial services to provincial areas, and have financed upwards of 6.6 million customers contracts since inception. While the main products continues to be vehicle related loans, accelerating lending to SMEs based on their business strategies to diversify product portfolio is one of the strategic initiatives. Their focus continues to be towards enhancing presence in the rural and semi-urban markets to grow their market share.

This loan from JICA helps Mahindra Finance expand lending to SMEs in low-income and special category states. It will contribute not only to sustainable economic growth, but also to even regional disparity, thus meet SDGs (Sustainable Development Goals) 8 and 9.