HDFC Bank, MastercardUSAID, and DFC today announced a $100-million credit facility for micro, small and medium enterprises, which will help promote small businesses in India to digitise and recover from the economic impacts of the pandemic, Mastercard said in a statement.
“HDFC Bank is proud to join hands with Mastercard, USAID, and DFC in the endeavor to support small businesses in India”, said Rahul Shukla, Group Head, HDFC Bank.
HDFC Bank will reach beyond its current customer base to make at least 50% of this credit facility available to new small business borrowers and women entrepreneurs, while Mastercard will provide skills training and education on digitisation options, and DFC and USAID will facilitate the extension of the credit facility by de-risking HDFC Bank’s lending to small business owners.
Furthermore, the credit facility will be made available exclusively to new credit customers, with a goal of at least 50% being women entrepreneurs.
“At USAID, we believe gender equality and women’s empowerment are not just a part of development but are its core”, said Veena Reddy, mission director, USAID India.
The new credit facility aims to expand lending to small businesses that need financing to maintain and expand their operations, and enable recovery through digitisation. It also aims to support women-led businesses.
The Finance Ministry on Sunday said banks have sanctioned Rs 25,586 crore to about 1,14,322 beneficiaries under the Stand Up India Scheme in the last five years for promoting entrepreneurship among women and SC & STs. The objective of Stand-Up India is to promote entrepreneurship amongst women, Scheduled Castes (SC) & Scheduled Tribes (ST) categories, to help them in starting a greenfield enterprise in trading, manufacturing and services sector, by both ready and trainee borrowers, the Finance Ministry said in a statement.
Under the scheme, bank loans between Rs 10 lakh and Rs 1 crore are provided to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one woman borrower per bank branch of Scheduled Commercial Banks.
Started in April 5, 2016, the scheme has benefited 93,094 women entrepreneurs with outstanding loan of Rs 21,200 crore as of March 23.
This scheme, which has been extended up to 2025, covers SC/ST and/or women entrepreneurs, above 18 years of age, it said.
In case of non-individual enterprises, 51 per cent of the shareholding and controlling stake should be held by either SC/ST and/or Women Entrepreneur and borrowers should not be in default to any bank/financial institution, it said.
About 20 per cent of the total, who are into garment-making overcame the shortfall in demand by adding new lines of activities like making masks with the help of working capital from the bank. (Representational image: IE)
The pandemic-ravaged months have taken a heavy toll on everyone and especially on women, who sadly were the first set of people in many households to take a hit on their careers – either due to a job loss or by opting out to help at home. But those who have engaged closely with women in their journey during the pandemic seem to have witnessed powerful stories of hope and entrepreneurship.
“Women may have been the worst-hit during the pandemic but we found them redefine entrepreneurial zeal and not only were they able to supplement shortfalls in their household incomes but were quick to adopt and pivot businesses to new realities,” says Jayshree Vyas, the managing director of SEWA Bank, a leading Gujarat-based cooperative bank, focused only on women – especially those that are either day-wage earners, migrant labour or running small businesses. SEWA stands for Shri Mahila Sewa Sahakari Bank.
Vyas does point out that there were challenges galore for all, including banks and that SEWA Bank was no exception. “Despite keeping the bank operations on, as it was categorized as essential services, and with all the challenging of skeletal staff attendance and physical distancing precautions, the bank in this challenging year has managed to grow its total balance sheet,” says Vyas. “While maintaining the revenue and profitability growth will be a challenge, our total balance sheet size has increased from Rs 425 crore pre-pandemic to around Rs 500 crore currently and we have added 30,000 new depositors,” she says.
What stands out during the pandemic months, she says, is the way in which its borrowers, who are all women, responded. About 20 per cent of the total, who are into garment-making overcame the shortfall in demand by adding new lines of activities like making masks with the help of working capital from the bank. Another 20 per cent of who are into foods-related businesses, sought access to working to build home-made foods and help in transportation linkages for home delivery. What has been new learning for Vyas was the financial prudence of women migrant labour. “About 30 per cent of our total members (the term she uses for borrowers) are migrant labour. Almost all of them have returned and almost 98 per cent of them have repaid their loans too,” says Vyas. She therefore finds, if you give women access to the capital they can come up with new ways to approach the business or pivot it to a new reality,” says Vyas. For instance, knowing that many people were managing without maids at home and doing their own cleaning and swapping, took to making long-handled brooms and supplying locally. In fact, Vyas says the desire to augment household income and to focus on savings was so strong that in just during the months of lockdown we saw around 5,000 new accounts open up in some of the worst affected areas with women seeking access to capital and to new saving options. SEWA Bank, where vegetable vendors make up to 30 per cent of total members, has 80 per cent of its total membership in urban areas and the rest in rural areas. It operates in six districts of Gujarat, including Ahmedabad, where it is headquartered.
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