Japanese lender JICA has teamed up with Citibank to provide a USD 125 million funding line to domestic private sector lender Indusind Bank. Indusind will be utilising the co-finance funding for onlending to the agricultural sector in the country, as per an official statement issued on Tuesday.
The funding includes a JPY 13 billion (approx USD 97.45 million) loan from the Japan International Cooperation Agency (JICA) and another USD 30 million from Citi to Indusind, it said.
The statement said Citi arranged the high impact social finance offering to improve financial access for farmers and catalyze capital investment in the agricultural sector in India.
It can be noted that JICA has been very active in funding commitments to India especially in the last few years which have witnessed a deepening of Indo-Japan ties, and the two countries also coming together to be a part of the Quad along with the US and Australia.
JICA’s previous commitments to India include over Rs 4,000 crore support to build the Mumbai Trans Harbour Link.
Citing official data, the Citi statement said the agriculture sector accounts for 17 per cent of GDP and employs 45 per cent of the people, and added that there is an urgent need to improve access to finance to stimulate capital investments in the agricultural sector.
It said Indusind has a presence in key agro centres across rural and semi urban locations.
Citi’s head of corporate bank for South Asia K Balasubramanian said the facility will be helpful in purchase of farm equipment, seeds, and fertilizers for farmers and will also be used by small agricultural supply chain service providers.
In the past, Citi has committed USD 1 trillion to sustainable finance by 2030, as well as expanding access to basic services for 15 million underserved and low-income households, including 10 million women.