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