OPIC Signs Loan Agreement With YES Bank to Support Small Business Growth in India
December 1, 2015
(The Exporting Source)
Builds on MoU signed during President of USA Barack Obama’s visit to India
Strong financial commitment from OPIC underscores partnership with key
regional inclusive lender
Washington D.C. / Mumbai: YES BANK, India’s 5th largest Private Sector Bank has
signed an agreement with the Overseas Private Investment Corporation (OPIC), the
U.S. Government’s Development Finance Institution, for debt financing of $245
million to increase lending to micro, small and medium enterprises (MSMEs) in
India. U.S.-based lender Wells Fargo Bank, N.A. will act as sponsor and
co-lender to the project, providing a loan of $20 million, bringing the total
facility amount to $265 million. Specifically, half of the financing will be
used to support either Micro-SMEs or SMEs in underserved rural and urban
markets.
Elizabeth Littlefield, OPIC’s President and CEO, signed the loan agreement
underscoring OPIC’s commitment to growing the small and medium business sector
in India. Loan guarantee support from OPIC allows YES BANK, an experienced local
lender with a broad network in India to more confidently extend their financing
to MSMEs.
“MSMEs are the growth engines and employment generators of our economy, and
access to banking credit is one of the key enablers. This significant
co-financing agreement of YES BANK with OPIC and Wells Fargo will help further
accentuate YES BANK’s ability to address the unique needs of SME and MSME
sectors. It is also extremely encouraging that world’s leading development
finance institutions have reiterated their faith in YES BANK’s business and
financial model and have in fact further enhanced the loan amounts post due
diligence,” said Rana Kapoor, MD & CEO, YES BANK.
“I’m proud to finalize a commitment first initiated on the occasion of President
Obama’s visit to India earlier this year. OPIC’s exciting partnership with YES
BANK, a proven Indian lending institution, and Wells Fargo will spark inclusive
economic growth in India,” said Elizabeth Littlefield, OPIC’s President and CEO.
“By choosing the portfolio growth strategy of a large number of impactful loans
to micro and small businesses, YES shows their commitment for broad-based
business growth in India and to spreading OPIC’s development reach. I look
forward to the lasting effects of our work in India.”
"Wells Fargo is pleased to sponsor this important facility on behalf of YES Bank
and work with OPIC as they continue to support YES Bank’s lending to the small
and micro businesses vital to economic growth in India,” said Richard Yorke,
head of Wells Fargo’s International Group.
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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