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YES Bank has signed an agreement with the Overseas Private Investment Corporation (OPIC), the US Government’s development finance institution, for debt financing of $245 million to increase the lending to micro, small and medium enterprises in India.
US-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.
“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," said Rana Kapoor, MD & CEO, YES Bank.
The World Bank estimates that viable and addressable demand for MSME lending in India 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.
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