DEG, the German development finance institution, and Citigroup Inc. have cofinanced US$76 mn to Shriram Finance Limited to expand lending to micro, small and medium enterprises and to support electric vehicle financing. The funding is intended to bolster working capital and fleet lending across India while enabling Shriram Finance to scale products targeted at smaller enterprises. The transaction represents a collaboration between a development financier and a global bank to channel private capital into priority sectors.

DEG and Citi characterised the financing as aimed at broadening access to affordable credit for underserved businesses and at accelerating the adoption of electric mobility within the commercial and last mile segments. Shriram Finance, a non-bank financial company, will allocate proceeds to MSME clients and to commercial vehicle customers seeking to transition to electric vehicles. The arrangement is expected to complement existing lending while aligning with climate and financial inclusion objectives.

Industry observers noted that such structured financing can reduce financing costs for small operators and can facilitate longer tenors and tailored repayment schedules suited to cashflow patterns in the sector. By enabling fleet owners to invest in electric vehicles, the facility may contribute to lower operating costs and to reduced emissions over time. Stakeholders emphasised the role of blended finance in de-risking private investment in nascent segments.

The partnership underscores the growing role of multilateral and international banks in supporting India’s MSME ecosystem and transition to cleaner transport. Shriram Finance will integrate the capital into its lending operations and monitor outcomes related to credit reach and loan performance. The participants indicated that the deal reflects continued investor interest in resilient, impact?oriented lending opportunities.