The Asian Development Bank (ADB) and HSBC India have signed an agreement to establish a $100 million partial guarantee program to support more than 0.4 million micro-borrowers, especially women running small businesses.

The agreement will provide financing of an equivalent of $30 million that will be initially disbursed to three microfinance institutions (MFIs) in India by April 2022. The partial guarantee arrangement will help MFIs access funding for on-lending activities as they expand operations after the coronavirus pandemic.

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ADB, a Manila-based multilateral funding agency, in a statement, said HSBC would expand its lending to microfinance institutions (MFIs) and non-bank finance companies, with ADB partially guaranteeing the loans.

This will expand HSBC’s risk appetite and deployed capital, helping to enhance private sector financing and improve financial inclusion in India. It is ADB’s first partnership with HSBC.