MICROCAPITAL BRIEF: World Bank Executes $407m in Loans for Microfinance Initiatives in India

Officials of the World Bank, a member of the World Bank Group, and the government of India recently signed two loan agreements totaling INR 19 billion (USD 407 million) for the development of microfinance initiatives in India, including a statistical information system in India. Approval of the loans by the World Bank was initially reported by MicroCapital on June 15, 2010.

The first loan of INR 14 billion (USD 300 million) will be used by the Small Industries Development Bank of India (SIDBI) for lending to microfinance institutions and to support SIDBI’s operations. The second loan of INR 5 billion (USD 107 million) will be used by the Indian government to develop a statistics tracking system to process economic and social data used for policy and decision making.

The International Bank for Reconstruction and Development (IBRD) will fund the first INR 9 billion (USD 200 million) of the SIDBI loan, while the remainder will be provided by the International Development Association (IDA). The IBRD will also fund the statistical information system loan. The IBRD and the IDA are subsidiaries of the World Bank.

By Jennifer Shevock, Research Associate

About the World Bank Group:
The World Bank Group consists of five associated institutions, all owned by member countries that carry ultimate decision-making power. Each institution plays a role in the group’s mission to fight poverty and improve living standards for people in the developing world. The World Bank Group encompasses the World Bank, which consists of the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA); the International Finance Corporation (IFC); the Multilateral Investment Guarantee Agency (MIGA) and the International Centre for Settlement of Investment Disputes (ICSID). Established in 1944, the World Bank’s two development institutions, IBRD and IDA, provide leveraged loans to developing countries for capital programs.

About the Small Industries Development Bank of India:
The Small Industries Development Bank of India (SIDBI) was established by the Indian Parliament in 1990. It provides credit to large- and medium-scale microfinance institutions (MFIs). SIDBI reported having facilitated total financial assistance equivalent to USD 397 million during the fiscal year ending March 2009. This amount has supported term loans, equity support and capacity building grants to MFIs.

Sources and Additional Resources:
“India signs two loan agreements with World Bank worth $407 mn” July 9, 2010. http://in.news.yahoo.com/43/20100709/836/tbs-india-signs-two-loan-agreements-with.html

“World Bank Provides $107 Million Loan to India towards Statistical Strengthening” July 10, 2010 http://www.orissadiary.com/ShowBussinessNews.asp?id=19693

MICROCAPITAL BRIEF: “World Bank Approves $300m Loan to Small Industries Development Bank of India (SIDBI) and $107m to Indian Government to Improve Statistics” June 15, 2010. https://www.microcapital.org/microcapital-brief-world-bank-approves-300m-loan-to-small-industries-development-bank-of-india-sidbi-and-107m-to-indian-government-to-improve-statistics/#more-5103

MicroCapital Universe: World Bank Group: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=The+World+Bank+Group

MicroCapital Universe: Small Industries Development Bank of India: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Small+Industries+Development+Bank+of+India+%28SIDBI%29

Browse the MicroCapital Universe and add your entry to the wiki at: https://www.microcapital.org/microfinanceuniverse/

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