KfW Signed a Loan Agreement for 210 million EUR

On behalf of the Federal Ministry for Economic Cooperation and Development (BMZ), KfW signed a loan agreement for 210 million EUR on 16 December 2020, with the Government of India for the COVID-19 Social Protection Crisis Response Programme. 

This is the second and final tranche of an overall package amounting to EUR 460 million, with the first loan for 250 million EUR being concluded in August.

The FC assistance is tailored towards supporting both immediate assistance for poor and vulnerable households that have been among the worst hit by the COVID-19 pandemic, while at the same time promoting institutional reforms to widen and deepen the coverage of social protection schemes. The first phase of the operation was rolled out through the Pradhan Mantri Garib Kalyan Yojana (PMGKY), the Government of India’s emergency social assistance program aimed at providing vulnerable groups and migrant workers with a mix of direct cash transfers, food security, and medical insurance cover through established national platforms.

Early results from household panel surveys across India indicate that 84% of India’s poorest households received at least one benefit under PMGKY. However, the surveys also reveal that a significant proportion of poor households have been unable to access benefits under the PMGKY. The second phase of the FC assistance program aims at tackling these gaps in coverage through long-term institutional reforms. The objective is to integrate the plethora of different social security programs at both national and state levels into a flexible and adaptable system that provides portable benefits to India’s vast migrant worker population.
The COVID-19 Social Protection Crisis Response Programme is parallel financing with the World Bank and includes the participation of other bilateral and multilateral donors. The World Bank is the lead agency.