New Delhi: The US government arm Overseas Private Investment Corporation (OPIC) has given USD 5 million loan to Grameen Impact Investments to support domestic small and medium enterprises.
The financing to Grameen Impact, a non-banking financial company, comes through IndusInd Bank in the form of a loan guarantee agreement.
The loan is to be deployed through the bank’s Impact Investing division, which will support Grameen Impact’s lending to local small and medium enterprises.
The OPIC guarantee enabled the bank to disburse an equivalent of Rs 33.5 crore (USD 5 million) loan to Grameen Impact, IndusInd Bank said in a statement.
“This is significant as it eliminates foreign exchange rate fluctuation risk from the balance sheet of Grameen Impact, a major challenge faced by borrowers in emerging markets,” it added.
Grameen Impact will use the financing to give loans to high impact social enterprises in India in sectors including financial services, affordable healthcare, affordable education, renewable energy and sustainable agriculture.
“By supporting lending to high-impact businesses in local currency, this project will help businesses in India overcome one of the main challenges to obtaining financing,” said Ray W Washburne, OPIC President and CEO.
Grameen Impact is backed by Grameen Capital India, whose shareholders include Acumen and other leading impact investors.
“India has rapidly become a global leader in impact investing, with over USD 5 billion of investments in this space.
“However, the bulk of this is equity; even today social enterprises struggle to raise debt financing, which is critical for scale… IndusInd Bank is furthering our commitment to build a ‘capital-with-a-conscience’ ecosystem,” said Royston Braganza, CEO of Grameen Impact Investments.