CreditAccess Grameen Raises $25 Mn ECB From Swedfund International AB
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CreditAccess Grameen Limited (CA Grameen), a microfinance institution by gross loan portfolio, has announced on Monday to have raised $ 25 million in ECB funding from Sweden’s development finance institution, Swedfund International AB (Swedfund). The first tranche of $ 15 million has been availed in July 2021.
This long-term funding will be utilized by CA Grameen to provide micro-loans to female borrowers from low-income households, thereby increasing their access to finance.
According to Udaya Kumar Hebbar, managing director and chief executive officer, CreditAccess Grameen, “This is a significant milestone, as it forms the first foreign currency ECB for CA Grameen. It has not only added to our diversified funding source but has also been part of the strategy of long-term stable funding, positively impacting the ALM.” He further added such stable funding will support our growth over the coming months.
Northern Arc Capital acted as the exclusive arranger for this transaction. Coming in the backdrop of the challenging second wave of the COVID-19 pandemic in India, Northern Arc Capital was successfully able to facilitate virtual due diligence to help the Swedfund team conclude their credit and impact assessment process.
“We are delighted to partner with CreditAccess Grameen in this investment to promote improved financial inclusion for women in rural India, which is expected to contribute to Swedfund’s mission to fight poverty by investing in sustainable businesses,” said Jane Niedra, head of financial inclusion, Swedfund.
This is CA Grameen’s first ESG fundraise, and the facility qualifies under the 2X Challenge that seeks to promote women's entrepreneurship and leadership. The transaction has an agreed-upon Environmental, Social, and Governance Action Plan which will not only further CAGL’s ESG commitments but also support Swedfund’s sustainable investment vision.
“The transaction is proof of Northern Arc’s ability to partner with clients across the size and credit rating spectrum. The platform’s network effects and relationship with diverse investor segments help attract new investors to its asset classes and partners,” added Bama Balakrishnan, chief operating officer, Northern Arc.