New Delhi, Jul 10 (IANS): India Friday signed two loan agreements worth $407 million with the World Bank for the development of micro-finance initiatives and a more accurate statistical information system.

A $300 million loan agreement was signed to scale up sustainable and responsible microfinance projects in the country.

It was signed by officials of the government of India, Small Industries Development Bank of India (SIDBI) and the World Bank.

The funding from the agreement will be used by SIDBI for lending to microfinance institutions (MFIs). It is designed to support their operations and growth, enhance their financial strength, and enable them to leverage private commercial funds to lend larger amounts to the under-served.

"In addition to providing funding for microfinance institutions to help them scale up their operations, this project also promotes transparency, good governance, and responsible microfinance," said Niraj Verma, World Bank senior financial sector specialist and project team leader.

The other loan of $107 million is for designing an effective and modern statistical systems in the country, something which has become necessary given its pace of economic growth.

"All of these changes need to be captured by the statistical system to provide the data needed to support effective policy and decision making at all levels," said Farah Zahir, World Bank senior economist and project team leader.

The International Bank for Reconstruction and Development will provide $200 million towards the loan, while the rest will be from the International Development Association.