Kolkata, Oct 21: HDFC Bank, Mastercard, U.S. International Development Finance Corporation (DFC), and U.S. Agency for International Development (USAID) today launched a $100 million credit facility to promote and encourage small businesses in India to digitize, while also helping Indian businesses, particularly those that are women-owned, to recover from the economic impacts of the pandemic.
COVID-19 has had a disproportionate impact on small businesses, forcing many to close prematurely. Additionally, the accelerated shift to digital payments engendered by the pandemic means that small businesses must adapt to changing market dynamics and consumer preferences to remain competitive and retain customer loyalty.
The new credit facility aims to expand lending to small businesses that need financing to maintain and grow their operations, and enable recovery through digitization, with an emphasis on supporting women-led businesses.
HDFC Bank is proud to join hands with Mastercard, USAID, and DFC in the endeavor to support small businesses in India. MSMEs are the backbone of the Indian economy and the ongoing pandemic has affected their lives and businesses.
This partnership, we believe, will not only help extend credit, but also advise and assist them to modernize and digitize their businesses. The highlight of this initiative is our commitment to encourage women entrepreneurs in India and be a meaningful partner in their entrepreneurial journey, said Rahul Shukla, Group Head Commercial and Rural banking, HDFC Bank.
At USAID, we believe gender equality and women’s empowerment are not just a part of development but are its core. Women have been disproportionately impacted by the COVID-19 pandemic, facing economic hardships that directly affect the livelihoods of their families and communities.
Through this partnership, USAID will help facilitate access to finance and support the digitization journey for women-owned small businesses and entrepreneurs to help them recover from the pandemic and reach their full potential, said Veena Reddy, Mission Director, USAID India.
DFC is proud to support this partnership to expand financing for small businesses, especially those owned by women, in India as they look to digitize, modernize, and become more resilient, said Algene Sajery, Vice President of DFC’s Office of External Affairs and Head of Global Gender Equity Initiatives.
This financing will enable women in India to remain in the workforce, succeed as entrepreneurs, and become more economically empowered, leading to post-COVID-19 economic stabilization, GDP growth, and increased employment regardless of gender.
Partnerships that align the strengths of the private sector, government, and philanthropy are critical to building back stronger from the pandemic, said Nikhil Sahni, Division President, South Asia, Mastercard.
Mastercard’s partnership with HDFC Bank, USAID and DFC is timely as it will provide much-needed financing to support MSMEs in their digitization journey, building resilience through greater participation in the digital economy.
To enable small businesses and women entrepreneurs to connect to the networks that power the digital economy, HDFC Bank will reach beyond its current customer base to make at least 50 per cent of this credit facility available to new small business borrowers, with a goal of at least 50 per cent of the facility being used for lending to women entrepreneurs. HDFC Bank will channel the credit via their extensive nationwide branch network.
Through existing collaborations with the Confederation of Indian Industry (CII) and the Confederation of All Indian Traders (CAIT), Mastercard will provide skills training and education to small business owners on their digitization options.
The Mastercard Center for Inclusive Growth will also help them to grow their revenue through a range of nationwide philanthropic training programs. This initiative is part of Mastercard’s INR $33 million (250 crores) commitment to enable small businesses in India to recover from the impact of COVID-19.
DFC and USAID are facilitating the extension of the credit facility by de-risking HDFC Bank’s lending to small business owners. DFC’s investment supports its 2X Women’s Initiative, through which the agency invests in projects that are owned by women, led by women, or provide a product or service that empowers women.
This program is part of USAID’s COVID-19 response in India as well as its global Women Economic Empowerment Fund initiative.
(UNI)
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