OPIC Issues Call for Proposals to U.S. Banks for Guaranteed Loan Facility for Small Businesses
April 8, 2013
WASHINGTON, D.C. – The Overseas Private Investment Corporation (OPIC), the U.S. Government's development finance institution, today announced a Call for Proposals for a new and innovative loan guarantee program designed to encourage U.S. banks to expand their lending to U.S. small and medium-sized enterprises (SMEs) that have projects in developing countries where OPIC does business.
The program’s principal goal is to make it easier for American banks – from a risk and capital reserve perspective – to do business in emerging markets, by encouraging participating banks to make loans to existing clients for projects that would not otherwise receive financing. At the same time, it will help U.S. businesses with projects in developing countries gain access to much-needed financing.
Called the U.S. Bank Guaranteed Loan Facility, the program will select qualified banks based on a review of their financial performance and interest in expanding lending to SMEs with emerging-market projects. Selected banks will underwrite loans based solely on their own credit and risk-rating policies. OPIC will ensure that credit-approved loans comply with the agency’s investment policies, with regard to effects on the U.S. economy, the environment, and workers’ rights.
Chief among its innovations, the program will enable selected banks to develop their own portfolio of loans up to an agreed maximum portfolio size, leaving it to them to determine who receives loans, their structure and amount. The amount guaranteed by OPIC will vary based on the project country’s development status, as determined by its gross national income per capita.
The program has been designed to be straightforward and cost-effective, with the OPIC documentation, risk-sharing, origination process and reporting substantially the same for each participating bank.
Details of the solicitation can be found at: www.opic.gov/what-we-offer/usbank-call-proposals
OPIC is the U.S. Government’s development finance institution. It mobilizes private capital to help solve critical development challenges and in doing so, advances U.S. foreign policy. Because OPIC works with the U.S. private sector, it helps U.S. businesses gain footholds in emerging markets catalyzing revenues, jobs and growth opportunities both at home and abroad. OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.
Established as an agency of the U.S. Government in 1971, OPIC operates on a self-sustaining basis at no net cost to American taxpayers. OPIC services are available for new and expanding business enterprises in more than 150 countries worldwide. To date, OPIC has supported more than $200 billion of investment in over 4,000 projects, generated an estimated $75 billion in U.S. exports and supported more than 277,000 American jobs.