The Grameen Crédit Agricole Foundation works for financial inclusion in India

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With 190 million unbanked adults, India has the second-largest unbanked population in the world after China (World Bank). The microfinance sector has become a key tool in combating financial exclusion in the country by providing financial and non-financial services to people excluded from the banking system. The sector has shown spectacular growth, reaching 60 million borrowers with a total portfolio of €27 billion.

To support the development of microfinance in India, the Grameen Crédit Agricole Foundation has granted a €3 million loan over three years to Pahal Financial Services Private Limited, a microfinance institution located in Ahmedabad, Gujarat. Since its inception in 2011, Pahal has served nearly 750,000 clients, mostly women entrepreneurs (98%), through 167 branches with total assets under management of €81 million. Today, Pahal is one of the fastest-growing microfinance institutions in India, thanks to its innovative and diversified product offering for low-income individuals.

“With this partnership, the Grameen Crédit Agricole Foundation is strengthening its work to promote financial inclusion and women’s empowerment in India. This financing is our first direct operation in India, using the external commercial borrowing facility recently opened by the Reserve Bank of India. This microfinance institution has demonstrated great resilience on numerous occasions, and we are confident that Pahal, its clients, and the entire sector will recover quickly from the crisis,” said Caroline Brandt, Investment Officer at the Foundation.

“The loan from the Grameen Credit Agricole Foundation is a validation of Pahal’s business model and demonstrates the resilience of the microfinance sector in India,” said Kartik Mehta, Co-founder and Managing Director. “At Pahal, we are committed to being part of the financial inclusion agenda for the most vulnerable in our society. This money will be used to provide loans to Pahal’s women beneficiaries,” added Purvi Bhavsar, Co-founder and Managing Director.

The Foundation's financial support comes as the microfinance sector emerges from the Covid-19 crisis. Following the lifting of the lockdown, anticipated microcredit applications are expected to trigger a rapid recovery in the sector. Pahal, in partnership with the Foundation, will support its borrowers to help them restart their activities.