KfW signs first development loan in financial sector with India

Frankfurt (ots) -

- USD 300 million for micro and small enterprises
- Important contribution to more employment, economic growth and
the reduction of poverty
- USD 40 million for environmentally-friendly municipal
infrastructure projects

KfW Development Bank has signed a USD 340 million agreement with
the Industrial Development Bank of India (IDBI) on behalf of the
Federal Ministry for Economic Cooperation and Development (BMZ). The
Indian bank will channel USD 300 million of the funds through to
microfinance institutions (MFI) and micro and small enterprises
(MSEs) in urban and rural areas for refinancing purposes and to
provide capital relief. A lack of access to needs-based financing
remains the greatest barrier to growth for Indian micro and small
companies. Their financing shortfall is estimated at more than EUR 40
billion. Here the development loan will provide considerable relief.
USD 40 million of the total will be used to realise selected
infrastructure projects such as environmentally-friendly water supply
and wastewater disposal in municipalities, as well as energy
distribution systems within the framework of private-public
partnership models.

"With this credit line, KfW is providing the IDBI with an
important and broadly effective contribution towards creating income
and fighting poverty in India. Growth among small companies triggers
local demand and consumption, secures employment and is a key factor
in the creation of new jobs", said Dr Norbert Kloppenburg, member of
the Executive Board of the KfW Group.

The importance of the almost 30 million Indian micro, small and
medium-sized companies of the formal sector is enormous. They
generate 45% of industrial production, contribute 40% of the
production intended for export and provide employment to over 69
million people.

With a portfolio of EUR 2.3 billion, around three-quarters of
which is made up of its own funds, KfW is one of the world's leading
microfinance financiers, especially for equity investments and
activities in Latin America and Eastern Europe/Central Asia. KfW has
already established itself as the leader among the financiers of
microfinance institutions in sub-Saharan Africa.

Contact:
KfW, Palmengartenstr. 5 - 9, 60325 Frankfurt
Kommunikation (KOM), Dr. Charis Pöthig,
Tel. +49 (0)69 7431 4683, Fax: +49 (0)69 7431 3266,
E-Mail: presse@kfw.de, Internet: www.kfw.de