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Publish Date : 31-Mar-2017

The Manila-headquartered Asian Development Bank (ADB) last week has accomplished the signing of a loan deal worth $32-million to support CreditAccess Asia (CAA).

Based in Amsterdam, CAA is a microfinance holding company and has business activities in India, Indonesia and the Philippines, with plans to enter into the Vietnamese market.

The ADB has agreed to provide this funding as part of its endeavors for financial inclusion and the investment is expected to boost the capital needed for the development of the microfinance institutions operating under the portfolio of CAA.

The regional lender has also decided to offer technical assistance grant of $500,000 in order to help CAA make expansion of its Asian footprint.

CAA has already expanded its operations in India (Graameen Koota), Indonesia (Bina Artha) and the Philippines (OnePuhunan), with a customer base of 1.8 million in the Asian region, of which 99.8% are women.

The company now plans for the expansion of its business in Vietnam, and is mulling over the IPO-based listing strategy also.

The ADB Director for the Private Sector Financial Institutions Division Christine Engstrom stated, Through this investment, ADB and CAA will help to deepen access to credit and finance for some of Asias most underserved markets.

Engstrom added, CAA provides significant support in the communities in which it operates and we are happy to support them and their Asian microfinance subsidiaries through their next stage of growth.

CAA has set a customer base target of 3.5 million women borrowers by the year 2021 and the ADB, which offers low-cost loans in comparison with the local lenders, will make provisions for grants and loans.

The CEO of CAA Paolo Brichetti commented, We are very pleased to have ADB on board as a strategic shareholder in CAA. ADB fully supports our mission to become a leading provider of financial products for micro and small businesses in India and Southeast Asia.

CAA is also going through some rough phases, while its Grameen Koota is witnessing the demonetisation impacts and credit rating agencies have downgraded several of its industry peers already.

The Reserve Bank of India (RBI) is not prepared to expand the grace period for NPA loans, and the microfinance sector, throughout the end of the fiscal year, is most likely to face the brunt of taxing circumstances.

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