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While in India for Republic Day, OPIC Teams with YES Banks and Wells Fargo to Support Indian Small Business Growth

Tuesday, 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.