ADB $200 Million Loan to YES Bank Helps Rural Women, Small Holder Farmers

News from Country Offices | 23 December 2014

DELHI, INDIA – The Asian Development Bank (ADB) has signed a loan of up to $200 million with YES Bank Ltd which will provide financing assistance to low income women borrowers and small-scale farmers in rural India.

"ADB is proud to partner with YES Bank in promoting rural financial inclusion in India,” said Todd Freeland, Director General, ADB Private Sector Operations. “ADB's capital investment and technical assistance will provide sustainable finance to low income women and their families.”

“In addition to income generation via female self-help groups, the project targets small farmers to allow them to benefit from agricultural value chains and enhance their productivity through better access to markets and investment finance.”

The agriculture sector supports over two-thirds of India’s population but falling crop yields and outputs threaten the incomes and food security of hundreds of millions. Low agricultural productivity due to farm level inefficiencies, obstacles to market access for farmers and a lack of investment capital undermine sector growth and compound rural poverty.

YES Bank will use ADB’s assistance to provide loans to women organized in self-help groups and smallholder farmers for working capital and other investments. A capacity building technical assistance of $1 million is part of the package. It will support YES Bank to improve financial literacy to women borrowers and to develop financial service products linking small farmers to markets.  

YES Bank finances women’s self-help groups through a successful Business Correspondent model and has 35 partners currently. The ADB loan aims to reach an additional 2.5 million rural, low income women and up to 37,000 small-scale farmers.

“This significant commitment from Asian Development Bank reiterates our focus towards responsible banking and furthering the financial inclusion agenda,” said Rana Kapoor, YES Bank’s Managing Director and Chief Executive Officer. “This loan will provide further impetus as we aim to achieve our long term goal of scaling up our agriculture and self-help groups loan book aggressively.”

YES Bank, listed on both the National Stock Exchange and the Bombay Stock Exchange, is the fourth largest private bank in the country with a market share of around 1% in terms of total Indian bank assets. It has a nationwide network of more than 500 branches.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region. In 2013, ADB assistance totaled $21.0 billion, including co-financing of $6.6 billion.