SBI Launches $500 Million ESG-Linked Loan To Support Women's Economic Advancement

The State Bank of India (SBI), the largest lender in the country, has launched a $500 million syndicated social term loan facility that will be used to support women’s economic advancement and gender-focused initiatives.

According to the lender, the facility will be used to support women’s empowerment initiatives and women’s economic advancement.

Focus On Women's Empowerment

The facility is aimed at supporting women’s empowerment initiatives, such as women’s entrepreneurship and women’s access to finance, as well as initiatives that focus on women’s economic advancement.

SBI has stated that the facility is part of the lender’s effort towards promoting gender equality and inclusive growth.

Speaking on the facility launch, the SBI chairman, C.S. Setty, stated that the facility is part of the lender’s effort towards integrating financial initiatives with social objectives. "This landmark social loan embodies our dedication to Environmental, Social, and Governance (ESG) principles, with a sharp focus on creating opportunities for women", he stated.

The bank has stated that the financing is in line with the United Nations Sustainable Development Goal 5, which specifically aims to achieve gender equality and empower women and girls.

Social Loans And ESG Financing

Social loans are one of the types of financing instruments used for providing finance to projects with social objectives. These social objectives can range from health-related projects to education and housing projects, among others.

Banks and financial institutions use ESG-linked instruments, such as green loans, social loans, and sustainability loans, for channelling finance towards projects with social outcomes.

Structure Of The Transaction

The loan has been structured as a syndicated loan, where lenders have come together to provide finance for the project through a single facility. Such a structure is commonly employed in international finance transactions for raising finance for projects.

In addition to this, the $500 million loan facility has a greenshoe option, where the loan amount can be increased based on the lenders' participation in the facility.

Mitsubishi UFJ Financial Group (MUFG) is acting as the original mandated lead arranger, underwriter, and bookrunner for the loan facility. In addition to this, the financial group is acting as the sole social loan coordinator for the facility.

SBI has stated that the loan facility will be used for providing finance for women empowerment projects across the country. This is the first syndicated social loan facility for women's empowerment exclusively from the bank.