ADB Partners with SK Finance to Provide $100M Loan to Boost EV Financing and Women-Owned MSMEs in India

“ADB is committed to promoting financial inclusion and supporting India’s ambitious climate goals,” said Suzanne Gaboury, Director General for Private Sector Operations at ADB.

The Asian Development Bank (ADB) and SK Finance Limited have signed a $100 million senior secured loan agreement aimed at enhancing financial access for women-owned micro, small, and medium-sized enterprises (MSMEs) and supporting the financing of electric vehicles (EVs) to promote sustainable transport in India.

SK Finance, a leading non-bank financial company in India that specializes in vehicle and MSME loans, will utilize the funding, which will be disbursed in two tranches, to expand its capacity to meet the growing demand for credit from underserved sectors. Of the $100 million, 20% will be allocated for EV financing, and the remaining 80% will be used for onlending to MSMEs, with a significant portion specifically directed toward businesses owned or operated by women.

Promoting Financial Inclusion and Sustainable Development

“ADB is committed to promoting financial inclusion and supporting India’s ambitious climate goals,” said Suzanne Gaboury, Director General for Private Sector Operations at ADB. “This project aligns with ADB’s strategic priorities by expanding access to finance for underserved segments, including women entrepreneurs, and facilitating the country’s transition to electric mobility. This will play a key role in reducing carbon emissions and improving air quality.”

In India, MSMEs contribute 30% to the country's GDP and 40% to exports, employing over 110 million people. However, these businesses, especially women-owned ones, face significant barriers to accessing financing. The financing gap for MSMEs is estimated to exceed $1 trillion annually, which this partnership aims to address by providing greater access to credit.

Supporting India's Transition to Electric Mobility

The transition to electric vehicles is a crucial part of India’s climate strategy, as transport accounts for 12% of the country’s energy-related carbon dioxide emissions. With India’s EV market expanding rapidly—over one million vehicles were registered in 2023—EVs, particularly two-wheelers and three-wheelers, are seen as a key technology pathway to reduce emissions and improve air quality.

“We are thrilled to partner with ADB in this transformative project,” said Rajendra Kumar Setia, Managing Director and CEO of SK Finance. “With ADB’s support, we will not only expand our outreach to underserved women entrepreneurs but also accelerate our efforts in electric vehicle financing, driving both economic growth and environmental sustainability.”

Expanding Access to Financing for Rural and Semi-Urban Communities

SK Finance, founded in 1994, currently operates 615 branches as of September 2024, with more than half of these located in rural and semi-urban areas. This extensive network allows the company to cater to the financing needs of local communities and small businesses, especially for light commercial vehicles, tractors, and two-wheelers used in goods transport and delivery services.

By extending its reach through the new financing agreement with ADB, SK Finance aims to accelerate economic development and improve access to clean transportation for underserved communities, furthering India’s transition to a green economy while ensuring the inclusion of women entrepreneurs in the financial ecosystem.

This initiative supports India’s broader goals of environmental sustainability, economic inclusion, and gender equity, with the potential to unlock significant positive impacts for both businesses and the environment in India.