Swedish fund approves US$25 million to back Indian women’s economic empowerment DevelopmentAid

In order to support financial inclusion and to contribute to women’s economic empowerment in rural India, Swedfund, the Swedish State Development Finance Institution, has approved funding of US$25 million to CreditAccess Grameen (CAG) Ltd, one of the leading microfinance institutions in India.

In addition to providing income-generating loans, CAG conducts financial literacy training to customers that aims to contribute towards women’s economic empowerment and a lasting impact in terms of improved income generation and gender equality.

The investment seeks to provide the underserved women of rural India with access to income-generating loans such as support to start a business, investment in machinery, increased productivity, or as working capital.

“India has been hit hard by COVID-19 leading to a halt in economic activity and a rise in poverty,” the Swedfund press statement issued on July 15 reads. Access to long-term funding is crucial to support continued lending to rural families for income generation, it added.

Swedfund’s support comes amid alarming data concerning the impact of the pandemic on women’s economic empowerment in India. Prior to the pandemic, women accounted for 20% of the workforce in India, an analysis indicated but unemployment surveys now show that they account for 23% of overall job losses, it added. Research by the Center for Monitoring Indian Economy shows that women were seven times more likely than men to lose their jobs in 2020 and 11 times more likely not to return to work. Another survey indicates that small businesses owned by women were worse hit by the pandemic than those owned by men. As many as 43% of women-owned enterprises covered by the survey reported less than US$134 in monthly profit compared to 16% of enterprises owned by men, it revealed.

Emphasizing that the CAG offering would benefit women and strengthen their economic empowerment, role, and opportunities in society, Maria Håkansson, Swedfund CEO said:

“In the wake of the pandemic, the demand for income-generating loans is expected to be high.” Equally important was to increase the importance of microfinance institutions, she added.

The growing population of India is expected to exceed 1.4 billion by the end of 2023
Although India has made significant progress towards financial inclusion with nearly 80% of adult Indians having a bank account in 2018, the growth has mainly been achieved in urban areas and socioeconomic bias still hinders women’s access to finance
India currently ranks 70th out of the 77 countries covered in the Female Entrepreneurship Index
The country has the highest gender gaps in terms of economic participation and opportunity

Managed by the Ministry of Enterprise and Innovation, Swedfund is Sweden’s development finance institution supporting sustainable investments in developing countries within the energy, climate, and healthcare sectors. It also focuses on reaching small and medium-sized companies.