While in India for Republic Day, OPIC Teams with YES Banks and Wells Fargo to Support Indian Small Business Growth
January 27, 2015
(OPIC)
WASHINGTON – The Overseas Private Investment
Corporation (OPIC), the U.S. Government’s
Development Finance Institution, signed a
memorandum of understanding today with India’s
YES BANK to explore OPIC financing of up to
$220 million to increase lending to micro,
small and medium enterprises (MSMEs) in India.
Specifically, $100 million of the financing
would be used to support either Micro-SMEs or
SMEs in underserved rural and urban markets.
U.S.-based lender Wells Fargo Bank, N.A., will
act as sponsor and co-lender to the project.
Elizabeth Littlefield, OPIC’s President and
CEO, signed the memorandum while traveling with
President Obama for India’s Republic Day
celebration. The agreement, signed alongside
YES BANK’s Managing Director and CEO Rana
Kapoor, underscores OPIC’s commitment to
growing the small and medium business sector in
India. Potential loan guaranty support from
OPIC would allow YES BANK, an experienced local
lender with a broad network in India to more
confidently extend their financing to MSMEs.
“We are excited to announce the next step in
our partnership with YES BANK in anticipation
of the economic growth it will spur,” said
Elizabeth Littlefield, OPIC’s President and
CEO. “OPIC’s history of partnering with
established banks in emerging markets has
allowed the agency to have an outsized impact
on critical development objectives around the
world. By joining a longstanding partner like
Wells Fargo and a proven regional institution
like YES BANK, OPIC and the U.S. Government can
help catalyze economic growth that is both
inclusive and sustainable.”
“This significant co-financing agreement with
OPIC reinforces the faith reposed by the
world's leading marquee development finance
institutions in YES BANK's business model. This
new chapter further provides incremental value
addition to several existing relationships with
other leading global DFIs/Multilaterals. This
is the first MoU signed by OPIC, the US
Government's Development Finance Institution,
with an Indian Bank since the formation of the
New Government in India. This will further
boost YES BANK's focus on SME and MSME sectors
generating a multiplier effect on job creation
and consequently on the Indian economy,” said
Rana Kapoor, YES BANK’s Founder and CEO.
The World Bank estimates that viable and
addressable demand for MSME lending in India
debt surpasses supply by $48 billion, a
shortfall that holds back the transformative
effect a thriving entrepreneur class can have
on a developing economy. This gap is
particularly pronounced in India’s low income
states, where approximately two-thirds of the
MSME debt gap resides.
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