Swedish capital infusion boosts financial inclusion for women in India
Introduction
Swedfund invests 10 MUSD through a senior unsecured loan to one of India’s leading providers of microfinance services - Satin Creditcare Network Ltd – with services aimed exclusively at women. By providing funding to Satin, Swedfund can support continued availability of funding to self-employed women predominantly within agriculture in the low-income segment of the population. Satin is one of India’s largest microfinance institutions with a particularly strong presence in rural areas, and is active in 23 states and union territories across India.
India has a growing population, which is expected to exceed 1.4 billion by the end of 2023. The country has made a significant progress towards financial inclusion with almost 80% of adult Indians having a bank account in 2018, compared to only 40% in 2011. Still, growth has mainly come from urban areas, and socioeconomic bias still hinders women’s—and women entrepreneurs’—access to finance. India currently ranks 70th out of the 77 countries covered in the Female Entrepreneurship index and demonstrates one of the highest gender gaps in terms of economic participation and opportunity in the world.
—A loan to Satin is an efficient way for Swedfund to reach a large number of female borrowers with small loan tickets and to support all these self-employed women with financial strength and resilience in the setback due to the Corona pandemic, says Swedfund’s CEO Maria Håkansson.
As part of the investment, Swedfund and Satin have also agreed to collaborate to further strengthen Satin’s Environmental Social Governance processes and internal gender practices.
The pandemic, with subsequent lockdown measures and disruptions for individuals and companies, has had a significant impact on Satin’s client base of self-employed women. Moreover, post-pandemic demand for income-generating loans is likely to be high, increasing the importance of microfinance institutions such as Satin.
Satin is a leading pan-Indian microfinance institution with 100% female microfinance borrowers. As of September 2020, Satin managed approx. USD 1 billion (INR 76.67 million) in assets, serving 3.1 million clients across 1,255 branch offices in 23 Indian states and union territories. It has a strong focus on client protection with robust and fair credit underwriting and collection processes and has been SMART-certified since 2016, currently in the process of renewing the certification. Satin’s borrowers are typically self-employed, often within agriculture and allied services, and live in rural areas or small towns. Satin Creditcare started its operations in 1990, eventually being registered as a Non-Banking Financial Company (“NBFC”) in 1998 and is currently listed on the National Stock Exchange of India and the Bombay Stock Exchange.