SBI–IFC Partnership: $150 Million Loan to Empower 8.64 Lakh Rural Women
NEW DELHI, (Economy India): The State Bank of India (SBI) and the International Finance Corporation (IFC) have expanded their partnership with a US$150 million social loan aimed at improving access to finance for approximately 8.64 lakh rural women engaged in agriculture and allied activities.
The partnership is also significant for India’s financial markets, as SBI and IFC have executed their first cross-currency swap under a recently signed International Swaps and Derivatives Association (ISDA) Master Agreement.
The transaction makes SBI IFC’s first domestic swap counterparty in India and its first local swap counterparty in South Asia, marking a new step in their financial collaboration.
90% of Loan to Support Women-Led Self-Help Groups
Under the social loan arrangement, up to 90 per cent of the financing will be directed towards women borrowers through Self-Help Groups (SHGs).
The remaining financing will support women entrepreneurs graduating from group-based lending to individual Micro Enterprise Loans under SBI’s Svayam Siddha Scheme.
The initiative is designed to strengthen access to formal credit for rural women and help them expand income-generating activities.
The financing will cover women engaged in several agricultural and allied sectors, including:
- Crop cultivation
- Animal husbandry
- Fisheries
- Food processing
- Other agriculture-linked livelihood activities
By improving access to institutional finance, the partnership aims to strengthen women’s participation in rural economic activities, support enterprise development and generate employment opportunities.
IFC’s First Credit Line to an Indian Public Sector Bank
The US$150 million social loan marks an important milestone for IFC, as it represents the development institution’s first line of credit to a public sector bank in India and its first investment in a state-owned bank in the country.
The partnership is expected to combine IFC’s development-financing expertise with SBI’s extensive banking network and reach across rural India.
SBI’s network and established relationships with Self-Help Groups could help channel institutional credit to women borrowers who may otherwise face difficulties accessing formal financing.
Svayam Siddha Scheme to Support Women Entrepreneurs
A portion of the financing will support individual women entrepreneurs under SBI’s Svayam Siddha Scheme.
The initiative is designed to help women from established Self-Help Groups move towards individual enterprise ownership and independent business activity.
SBI launched the scheme to make formal credit more accessible to women entrepreneurs associated with Self-Help Groups promoted under the National Rural Livelihoods Mission.
The scheme covers eligible micro-enterprise activities across agriculture, manufacturing and services. It seeks to simplify the credit process and reduce documentation-related barriers for women starting or expanding businesses.
The transition from SHG-based borrowing to individual enterprise loans is expected to help eligible women scale their economic activities and build sustainable businesses.
Cross-Currency Swap Strengthens Rupee Financing
Beyond the social loan, the partnership includes the execution of the first cross-currency swap under the recently signed ISDA Master Agreement between SBI and IFC.
The arrangement makes SBI IFC’s first domestic swap counterparty in India and its first local swap counterparty in South Asia.
The swap mechanism will enable IFC to mobilise long-term funding in Indian rupees for private-sector investments while helping manage foreign-exchange risks.
Currency fluctuations can increase borrowing costs and create uncertainty for businesses accessing foreign-currency financing. Local-currency funding arrangements can help reduce this exposure and provide greater predictability for borrowers.
The partnership is expected to support financing in sectors such as:
- Infrastructure
- Agribusiness
- Financial services
- Other development-oriented private-sector activities
IFC Expands Its Local Currency Financing in India
IFC said it had funded approximately Rs 30,040 crore, equivalent to around US$3.7 billion, through the US dollar-Indian rupee cross-currency swap market over the preceding three years.
The collaboration with SBI is expected to further strengthen the institution’s ability to access long-term rupee funding and expand local-currency financing for private-sector investments.
For businesses, access to rupee-denominated financing can reduce exposure to exchange-rate movements, particularly when revenues and operating expenses are generated in the domestic currency.
The arrangement also represents a step towards deepening India’s domestic financial markets and expanding the availability of long-term financing.
IFC and SBI Highlight Financial Inclusion
Roshika Singh, Principal Country Officer at IFC, said SBI was an important partner for the institution, particularly because of its ability to extend capital to rural Self-Help Groups and provide access to India’s rupee markets.
SBI Deputy Managing Director Satyendra Kumar Singh said the collaboration would expand financial access for women-led SHGs and rural entrepreneurs.
He also highlighted the importance of the local-currency swap arrangement in strengthening domestic financial markets and improving the availability of long-term rupee financing for private-sector investments.
Alignment with World Bank Group’s AgriConnect Programme
The initiative also aligns with the World Bank Group’s AgriConnect programme, which seeks to improve access to finance and strengthen opportunities for people participating in agricultural value chains.
Women play a significant role in India’s rural economy, particularly in farming, livestock management, fisheries and food processing. However, access to affordable institutional credit remains an important factor in helping women-led enterprises expand.
By combining SHG-based lending with individual micro-enterprise financing, the SBI-IFC partnership seeks to address different stages of women’s economic participation.
A Major Push for Rural Women’s Economic Participation
The expanded partnership brings together two important objectives: improving financial inclusion among rural women and strengthening the availability of long-term rupee financing for businesses.
The US$150 million social loan is expected to support around 8.64 lakh women through SHGs and individual enterprise loans, while the cross-currency swap arrangement will deepen cooperation between IFC and SBI in India’s domestic financial markets.
The initiative highlights the growing role of development finance and institutional banking in supporting women’s entrepreneurship, rural livelihoods and broader economic participation.
(Economy India)
