The finance division of Larsen and Toubro, a publicly-held engineering and construction company, will extend its microfinance lending facility to Gujarat and Orissa, two states in North India. The company already has loan exposure of around INR 5 trillion (USD 106 million) in the states of Andhra Pradesh, Tamil Nadu, Maharashtra and Karnataka. According to N Sivaraman, senior vice-president of the finance division, the company follows a model of direct lending through joint liability groups. Groups secure loans of INR 5000 (USD 107) to INR 50000 (USD 1070).
The company is also currently awaiting initial clearance from the Insurance Regulatory Development Authority (IRDA) so that it may establish a microinsurance business.
By Jay Kumar, Research Assistant
Additional Sources:
1.) Source Article: New Kerala: “Larsen and Toubro Finance to extend micro finance facility in Orissa and Gujarat” http://www.newkerala.com/news/fullnews-47183.html
2.) Insurance Regulatory Development Authority (IRDA): http://www.irdaindia.org/
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