While in India for Republic Day, OPIC Teams with YES Banks and Wells Fargo to Support Indian Small Business Growth
January 27, 2015
WASHINGTON – The Overseas Private Investment Corporation (OPIC), the U.S. Government’s Development Finance Institution, signed a memorandum of understanding today with India’s YES BANK to explore OPIC financing of up to $220 million to increase lending to micro, small and medium enterprises (MSMEs) in India. Specifically, $100 million of the financing would be used to support either Micro-SMEs or SMEs in underserved rural and urban markets. U.S.-based lender Wells Fargo Bank, N.A., will act as sponsor and co-lender to the project.
Elizabeth Littlefield, OPIC’s President and CEO, signed the memorandum while traveling with President Obama for India’s Republic Day celebration. The agreement, signed alongside YES BANK’s Managing Director and CEO Rana Kapoor, underscores OPIC’s commitment to growing the small and medium business sector in India. Potential loan guaranty support from OPIC would allow YES BANK, an experienced local lender with a broad network in India to more confidently extend their financing to MSMEs.
“We are excited to announce the next step in our partnership with YES BANK in anticipation of the economic growth it will spur,” said Elizabeth Littlefield, OPIC’s President and CEO. “OPIC’s history of partnering with established banks in emerging markets has allowed the agency to have an outsized impact on critical development objectives around the world. By joining a longstanding partner like Wells Fargo and a proven regional institution like YES BANK, OPIC and the U.S. Government can help catalyze economic growth that is both inclusive and sustainable.”
“This significant co-financing agreement with OPIC reinforces the faith reposed by the world's leading marquee development finance institutions in YES BANK's business model. This new chapter further provides incremental value addition to several existing relationships with other leading global DFIs/Multilaterals. This is the first MoU signed by OPIC, the US Government's Development Finance Institution, with an Indian Bank since the formation of the New Government in India. This will further boost YES BANK's focus on SME and MSME sectors generating a multiplier effect on job creation and consequently on the Indian economy,” said Rana Kapoor, YES BANK’s Founder and CEO.
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.
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 $76 billion in U.S. exports and supported more than 278,000 American jobs.
YES BANK, India’s fourth largest private sector Bank, is the outcome of the professional & entrepreneurial commitment, vision & strategy of its Founder Rana Kapoor and his top management team, to establish a high quality, customer centric, service driven, private Indian Bank catering to the Future Businesses of India.
YES BANK has adopted international best practices, the highest standards of service quality and operational excellence, and offers comprehensive banking and financial solutions to all its valued customers. YES BANK has a knowledge driven approach to banking, and a superior customer experience for its retail, corporate and emerging corporate banking clients. YES BANK is steadily evolving its organizational character as the Professionals’ Bank of India with the uncompromising Vision of “Building the Best Quality Bank of the World in India by 2020
Wells Fargo & Company is a nationwide, diversified, community-based financial services company. Founded in 1852 and headquartered in San Francisco, Wells Fargo provides banking, insurance, investments, mortgage, and consumer and commercial finance and has offices in 36 countries to support customers who conduct business in the global economy.