Yes Bank gets another $150 million from OPIC to fund SME lending
Yes Bank receives third round of funding, to the tune of $150 million, from the US government and Wells Fargo to fund SME lending
New Delhi: Private sector Yes Bank has received another round of $150 million funding from the US government and Wells Fargo to fund SME (small and medium enterprise) lending. This is the third round of funding as part of an arrangement between Overseas Pvt. Investment Corp. (OPIC)—US government’s development finance institution—and Wells Fargo, with the objective to increase lending to SMEs in India.
OPIC will provide $75 million in financing to Yes Bank and up to $75 million as a syndicated financing from Wells Fargo Bank, a part of financial services provider Wells Fargo & Company. This is the third transaction between OPIC and Yes Bank and comes close on the heels of last year’s $265 million OPIC facility, which the bank will use to extend SME financing in India, Yes Bank said in regulatory filing.
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“Specifically, $50 million of the financing would be used to expand support to women-owned businesses, while another $50 million will be used for financing small and medium enterprises (SME) in low income states,” it said.
SMEs contribute about 45% of industrial output and employ 42 million people in the country. It is estimated that 3 million women owned businesses in India employ over 8 million people. However, only about a quarter of them are able to get the finance they need to grow and create jobs, Yes Bank said.
“OPIC’s facility will help Yes Bank expand its SME lending capacity, specifically enabling them to reach both women and entrepreneurs in low income states who have much to contribute to India’s economic growth,” Dev Jagadesan, OPIC acting president and chief executive officer said.