ADB to provide debt financing to Cholamandalam Investment and Finance Company Limited by subscribing to up to $150 million (in INR equivalent) of senior secured nonconvertible debentures. The proposed debt financing will have a tranche structure with tenors of 3 to 5 years and respective bullet maturities.
|Project Name||Expanding Credit Delivery for Micro-, Small-, and Medium-Sized Enterprises Project|
|Borrower/Company||Cholamandalam Investment and Finance Company Limited
|Type or Modality of Assistance||
|Strategic Agendas||Inclusive economic growth
|Drivers of Change||Private sector development
|Sector / Subsector||
Finance / Inclusive finance
|Gender Equity and Mainstreaming||Some gender elements|
|Responsible ADB Department||Private Sector Operations Department|
|Responsible ADB Division||Private Sector Financial Institutions Division|
|Responsible ADB Officer||Taneja, Anshukant|
|Description||ADB to provide debt financing to Cholamandalam Investment and Finance Company Limited by subscribing to up to $150 million (in INR equivalent) of senior secured nonconvertible debentures. The proposed debt financing will have a tranche structure with tenors of 3 to 5 years and respective bullet maturities.|
|Objectives and Scope||Chola will use the proceeds of ADB's debt financing to finance loans to MSMEs in semi-urban and rural areas in India, with up to 30% of ADB's funding for the Loan Against Property segment, and at least 50% of the funding targeting less-developed states.|
|Status of Development Objectives||On-going.|
|Status of Operation/Construction||On-going.|
|Linkage to Country/Regional Strategy||The proposed transaction contributes to finance sector development by providing enhanced access to finance for MSMEs through an established NBFC, which is an important component of the finance sector in India. ADB''s Midterm Review also seeks to promote inclusive growth. Without access to formal financial services and credit, lower-income people or underserved segments of the population will be excluded from the growth process and its benefits. According to ADB''s country partnership strategy for India, 2018- 2022 and the country operations business plan, 2017- 2019, ADB''s nonsovereign operations will continue to focus on the finance sector and MSME development in India, which is also a high priority for the government.|
|Summary of Environmental and Social Aspects|
|Environmental Aspects||The business activities of Cholamandalam have minimal or no adverse environmental impacts|
|Involuntary Resettlement||Target customers for the MSME segment include micro and small manufacturers, service enterprises, wholesalers and distributors, agri-inputs stockists, traders and distributors of farm and MSME produce. Cholamandalam's established procedures for screening of all loans, for (i) the negative and exclusion list of activities and (ii) for potential land acquisition and involuntary resettlement impacts, will ensure that the proposed debt financing will not result in any involuntary resettlement impacts.|
|Indigenous Peoples||The project is not expected to entail any significant impact on indigenous peoples.|
|Stakeholder Communication, Participation, and Consultation||The primary stakeholders in the project are the MSME borrowers who will seek loans from Cholamandalam for their investment financing needs.|
|Timetable for assistance design, processing and implementation|
|Concept Clearance||13 Jun 2017|
|Credit Committee Meeting||16 Nov 2017|
|Approval||08 Dec 2017|
|Last PDS Update||12 Jun 2019|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
The Access to Information Policy (AIP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.
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|Title||Document Type||Document Date|
|Expanding Credit Delivery for Micro-, Small-, and Medium-Sized Enterprises Project: Initial Poverty and Social Analysis||Initial Poverty and Social Analysis||Nov 2017|
|Expanding Credit Delivery for Micro-, Small-, and Medium-Sized Enterprises Project: Report and Recommendation of the President||Reports and Recommendations of the President||Nov 2017|
|Expanding Micro, Small and Medium Enterprise Lending: Project Data Sheet (हिन्दी)||Translated PDS||Nov 2017|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
None currently available.
None currently available.
The Access to Information Policy (AIP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.
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