Printable Version

OPIC Signs Loan Agreement With YES Bank to Support Small Business Growth in India

Tuesday, 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.