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ADB and Shriram Finance to Accelerate MSME and EV Financing in India

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.

March 26, 2025. By Aishwarya

The Asian Development Bank (ADB) has signed a loan agreement with Shriram Finance Ltd. for USD 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 USD 306 million financing package led by ADB as the mandated lead arranger and bookrunner, which includes a loan of USD 150 million from the Japan International Cooperation Agency and INR 500 million from the Export-Import Bank of India.

Shriram Finance Ltd. 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. 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,” said Mio Oka, Country Director for India, ADB.

MSMEs play a vital role in India’s economy, contributing 30 percent 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 percent 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. 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,” said Umesh Revankar, Executive Vice Chairman, Shriram Finance Ltd.

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Sustainable Transport

Asian Development Bank

Shriram Finance Limited

Electric vehicle supply chain

Electric vehicle manufacturer

Electric vehicle adoption