New Delhi: Yes Bank on Tuesday signed a pact with Overseas Private Investment Corporation (OPIC), an arm of the US government's development finance institution, for $220 million (about Rs 1,350 crore) loan for on-lending to micro, small and medium enterprises.
The loan to the Indian private sector lender is part of OPIC's $1 billion assistance for India, announced by President Barack Obama at the India-US Business Summit on Monday. The loan is for 12 years and the bank will draw it one go.
"Specifically, $100 million of the financing would be used to support either micro-SMEs or SMEs in underserved rural and urban markets. The agreement underscores OPIC's commitment to growing the small and medium business sector in India," Yes Bank said in a statement.
Overall, the MSME sector contributes about 40 per cent to India's exports, and contributes about 35 per cent to the country's GDP.
"It is a very meaningful agreement," said Yes Bank MD and CEO Rana Kapoor during the signing of the pact.
"This deal will also allow us to go into the underserved areas and to go into urban areas. This will be a very important part of our deliverables," he added.
US-based Wells Fargo Bank will act as a sponsor and co-lender to the project.
The agreement was signed by OPIC President and CEO Elizabeth Littlefield and Mr Kapoor of Yes Bank.
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