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OPIC, RBL Bank and NeoGrowth Sign Commitment for SME Financing to Retail Businesses in India



Friday, October 7, 2016

(OPIC)  Innovative technology helps provide financing to underserved markets

WASHINGTON – The Overseas Private Investment Corporation (OPIC), the U.S. Government’s development finance institution, RBL Bank Limited, and NeoGrowth Credit Private Limited today announced they’ve reached a commitment to provide financing for small and medium enterprises (SMEs) that operate in the Indian retail space. RBL Bank’s financing to NeoGrowth, made possible by an OPIC $5 million loan guaranty, will unlock stable, long-term financing for NeoGrowth to provide loans for retail small businesses across India that are typically excluded from mainstream financing.

NeoGrowth, a Mumbai-based non-bank finance institution, uses innovative technology to serve the financing needs of these businesses, which have traditionally struggled to obtain financing from commercial banks due to their small size, inadequate credit history and lack of collateral. By analyzing turnover data from a merchant’s point-of-sales terminal, NeoGrowth uses a proprietary credit scoring system to help determine creditworthiness. The OPIC guaranty will allow NeoGrowth to provide loans ranging in size from three thousand to $120 thousand to these retail SMEs, which will have a positive impact on job creation and economic growth in India.

“OPIC is committed to helping underserved small businesses gain access to the loans they need to grow their businesses,” said Elizabeth L. Littlefield, OPIC President and CEO. “In the retail sector in India, many small businesses can’t simply go to a bank and get a loan – their businesses aren’t large enough or don’t have a credit history. With the help of OPIC and RBL, NeoGrowth will use its innovative technology to invest in these small retail businesses, helping them to grow and thrive.”

Vishwavir Ahuja, Managing Director & CEO, RBL Bank, said, “We are very happy to partner with OPIC- one of the world’s leading development financial institutions in further expanding our existing relationship with NeoGrowth- a Non- Banking Finance Company with an innovative business model dedicated to financing the small & medium (SME) business enterprises in India. As a bank, we have stayed focused on serving the needs of India’s growing SME sector especially the emerging segments such as organized retail, e-commerce, logistics and consumer services. This financing structure, leveraging OPIC’s strengths and RBL’s India expertise, will enable NeoGrowth to steadily lend to industries and segments that have good growth potential and enable these entities to grow to the next level.”

“We were wondering how to mobilise additional resources to lend to our customers, and the OPIC loan guarantee backed arrangement with RBL Bank will help extend our reach and serve many more customers,” said Piyush Khaitan, Founder and Managing Director of NeoGrowth. “Over 50% of small businesses in India are denied credit using traditional credit-assessment, and NeoGrowth reaches out to them. Enabling first-time borrowers and women entrepreneurs is an area of special focus for NeoGrowth”

This commitment is provided under our new Portfolio for Impact (PI) program, which targets smaller, earlier stage investments in high impact social enterprises. OPIC launched PI in 2014 to focus on supporting high-impact projects that might be particularly challenged to obtain financing. Two years later, the success of the PI program has helped establish that small businesses can achieve a powerful positive social impact, and small amounts of financing can go a long way to supporting their mission.