The Asian Development Bank approved a $200 million loan to support fiscal reforms and social development in Kerala, its first aid to the southern Indian state, the multilateral lending agency said on Tuesday.
The government of the Netherlands is co-financing the programme with a $50 million grant, the Philippine-based ADB said.
"We welcome Kerala's commitment to reform and ADB and the State government intend this loan to be the beginning of a long-term partnership that involves work in sectors such as power and infrastructure," the Director-General of ADB's South Asia Department, Yoshihiro Iwasaki, said in a statement.
Financial problems and rising debts have threatened Kerala's ability to provide essential services to poor and marginalised communities in the state with a population of 32 million, the ADB said.
In a separate statement, the ADB said it approved loans totaling $90 million to Vietnam to boost incomes, job opportunities and quality of rural life.
One programme loan for $60 million will assist the government in tackling the key constraints to increasing productivity, profitability and competitiveness, with the emphasis on small-scale farmers and small and medium scale enterprises.
The other $30 million loan project will encourage the development of agro-industry by widening access to medium and long-term loans, the ADB said.