ADB and Shriram Finance Sign Deal to Boost MSME and EV Financing in India

NEW DELHI, INDIA (24 March 2025) — The Asian Development Bank (ADB) and Shriram Finance Limited have signed a loan agreement for $150 million to boost access to finance for micro, small, and medium-sized enterprises (MSMEs) in India with a focus on business loans and for financing electric vehicles (EVs) and low-emission commercial vehicles for business purposes. The loan will particularly benefit women-owned MSMEs and those in lagging states.

The transaction is part of a total $306 million financing package led by ADB as the mandated lead arranger and bookrunner, which includes a loan of $150 million from Japan International Cooperation Agency and INR 500 million from Export-Import Bank of India.

Shriram Finance Limited is the flagship company of the Shriram Group and is one of India’s largest non-banking financial companies specializing in commercial vehicle financing and MSME lending.

“This project underscores ADB’s commitment to supporting financial inclusion and sustainable development in India while addressing the significant financing gap faced by MSMEs,” said ADB Country Director for India Mio Oka. “By partnering with Shriram Finance Limited, we will empower MSMEs, particularly women entrepreneurs, and accelerate the transition to electric mobility, which is crucial for reducing air pollution and achieving India’s climate goals.”

MSMEs play a vital role in India’s economy, contributing 30% of India’s GDP and employing over 123 million people. However, they face significant challenges in accessing formal credit, with only a quarter of the MSME market being served by financial institutions. Women entrepreneurs face additional barriers due to social norms and limited access to collateral. ADB’s loan will help bridge this gap by enhancing Shriram Finance’s ability to provide tailored financial solutions to MSMEs, enabling them to reach underserved segments particularly in rural, semi-urban areas and in lagging states, and provide economic opportunities for women-owned MSMEs. ADB’s loan also supports the government’s initiatives to reduce air pollution through the adoption of EVs and low-emission (Bharat Stage-VI compliant) vehicles. The government’s EV30@30 initiative targets 30% of all new vehicle sales to be electric by 2030.

“We value ADB’s support and funding, which will enable us to expand our financing to underserved MSMEs and promote the adoption of electric vehicles,” said Shriram Finance Limited Executive Vice Chairman Umesh Revankar. “Our continued partnership with ADB aligns with our corporate mission to drive inclusive growth and support India’s transition to a greener economy. This facility strengthens our commitment to financial inclusion and economic development.”

Founded in 1979, Shriram Finance has 3,196 branches and 79,405 employees serving over 9 million customers, with assets under management of INR 2.54 trillion and strong operations in rural and semi-urban areas. It is well-positioned to support underserved MSMEs and drive the adoption of electric and low-emission vehicles.

ADB is a leading multilateral development bank supporting sustainable, inclusive, and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges together, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure, and safeguard our planet. Founded in 1966, ADB is owned by 69 members—49 from the region.