Mumbai (Maharashtra) [India], May 2: Sa-Dhan, an RBI – appointed self-regulatory organisation of Microfinance and Impact Finance Institutions in India, has signed a Memorandum of Understanding (MoU) with Bank of India for expanding the financing access to small and micro and women-led enterprises. Both the entities will collaborate in achieving crucial National Financial Inclusion and Sustainable Development Goals (SDGs).
The MoU will be a non-commercial arrangement and include key areas of collaboration such as Enterprise Finance for SHGs and Non-SHG Members, Climate – Resilient Technologies and Green Financing, WASH (Water, Sanitation and Hygiene) Financing, Co-lending to MFIs, Digital Transformation and Adoption of Technologies and most importantly, Financial Literacy and Awareness about Government Schemes.
Under Enterprise Finance for SHG and Non-SHG Members, the MoU will facilitate enterprise finance for women-led micro and small businesses including self-help groups. Boosting green financing, the MoU will promote co-lending models and term loans for adoption of green technologies such as solar irrigation, energy-efficient equipment, and sustainable agri-business models. The joint initiative will also extend financial support to micro and small enterprises working in sanitation, clean water supply, and hygiene-focused businesses or SHGs engaged in toilet construction, water filtration units, and waste management enterprises for rural and semi-urban areas. This MoU will further pave ways for collaborating with microfinance institutions to provide affordable and flexible financing access to underserved communities, expand the reach of micro-loans for women entrepreneurs. The loan disbursement, tracking and efficiency monitoring will be ensured through digital platforms. Both Sa-Dhan and Bank of India will implement initiatives to increase awareness of government schemes, financial services, and social security programmes among rural entrepreneurs.
Sa-Dhan will facilitate the identification of SHG and non-SHG individual entrepreneurs requiring enterprise financing. It will also conduct capacity-building programmes for Vitta Sakhis, SHG members, and rural entrepreneurs and support the adoption of digital platforms and financial technology solutions in collaboration with BOI.
Mr Jiji Mammen, Executive Director and CEO of Sa-Dhan said, “This is a major step taken to ensure an equitable access for enterprises, including SHGs and Non-SHGs to affordable financing and achieve other sustainable development goals like climate financing. Coupled with digital adoption and financial literacy programmes, we are expanding the footprint of enterprise financing to rural and semi-urban areas and empowering small businesses and women-led enterprises to access flexible lending for inclusive development.”
Mr P. R. Rajagopal, Executive Director of Bank of India said, “It is a milestone partnership for boosting the small, micro and women-led enterprises by allowing them timely and seamless access to financing. Collaboration between the two entities will help in achieving crucial financial Inclusion and sustainable development goals. The initiative will not only help SHGs and non-SHG members, but also enable leveraging climate – resilient technologies through green financing and expand the scope WASH and digital literacy programmes.”
Sa-Dhan is the first and largest association of community development finance institutions in India formed for supporting and strengthening the agenda of fostering Inclusive Impact Finance in India. It strives for creating a better understanding of the microfinance sector among policymakers, funders, banks, governments, researchers, and practitioners. Sa-Dhan has about 220 members working in 33 states/UTs and over 646 districts, which includes both, for Profit and Not for Profit MFIs, SHG promoting institutions, banks, rating agencies, capacity-building institutions etc. Sa-Dhan’s members with diverse legal forms and operating models, reach out to approximately 63 million clients with loan outstanding of more than Rs 2,27,410 crore. Sa-Dhan is also recognized as a National Support Organization (NSO) by National Rural Livelihood Mission (NRLM).
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