Shriram Transport Finance Company Limited (STFC) said it had secured a long-term funding of $250 million from the U.S. International Development Finance Corporation (DFC).
The $250 million External Commercial Borrowing (ECB) is a fixed-rate 10-year loan under STFC’s Social Finance framework, per the non-banking finance company’s statement. STFC did not disclose the interest rate at which the funds were raised.
Funds raised from DFC can be used for commercial purpose vehicle financing; alternate fuel (CNG, LPG and electric) vehicle financing; employment generation through MSME loans, specifically finance women entrepreneurs; cater to laggard states of the country and empower and promote the social and economic status of the underserved communities in India, the company said.
Umesh Revankar, VC & MD, STFC, said, “We will help fund more individual operators to buy vehicles in new markets, provide funding towards employment generation in rural areas, and empower more communities to optimise their income and have a better quality of life.”
Andrew Herscowitz, Chief Development Officer of DFC observed that DFC’s financing will help increase access to finance for owner-operators and other small businesses to purchase commercial vehicles, including business owners from rural and underserved communities.
“With DFC’s loan, STFC will help to green India’s commercial transport sector, the most difficult sector to decarbonizs, by financing alternative fuel and lower-emissions vehicles,” Herscowitz said.
At the beginning of 2022, STFC had raised $475 million through a 144A Bond from the international market, thereby continuing to diversify its funding profile.