The Centre on Friday signed two agreements with the World Bank with latter agreeing to give $407 million loan to scale up microfinance services in unbanked areas and improve capacity to generate quality statistics.
While $300 million is for ‘Scaling up sustainable and responsible microfinance project', $107 million has been granted for ‘India statistical strengthening project'.
The objective of ‘Scaling up sustainable and responsible microfinance project' is to scale up access to sustainable microfinance services to the financially excluded, particularly in under-served areas of India through, among other things, the introduction of innovative financial products and fostering transparency and responsible finance.
The project will be implemented by the Small Industries Development Bank of India (SIDBI) over five years.
“Increasing access to finance for millions of India's financially under-served people remains a challenge,” said World Bank senior financial sector specialist Niraj Verma.
While $100 million is a credit from World Bank's concessionary lending arm International Development Association, the remaining $200 million is a loan from the International Bank for Reconstruction and Development.
Similarly, the ‘India statistical strengthening project' will support statistical reforms in the country.
The four main policy areas of the reform are: strengthening the institutions of leadership and coordination of the national statistical system; improving and increasing the support provided by the Central Government and the Ministry of Statistics and Programme Implementation to the statistical systems of States and Union Territories; strengthening the capacity and performance of the statistical systems in a majority of states and improving the coverage, quality, timeliness and credibility of statistics generated by states.
It is a single tranche policy-based operation and the closing date will be 12 months after the loan has become effective.
