US govt body OPIC offers $5m loan guarantee for SME loans

Mid-sized private sector lender RBL Bank today entered into an agreement under which the US government's development finance institution, Overseas Private Investment Corporation (OPIC), has committed USD 5 million for guaranteeing loans to domestic small businesses.
"RBL Bank will lend to Neogrowth Credit to enable it to provide loans to SMEs excluded from mainstream funding. This financing will be backed by a USD 5-million loan guarantee from OPIC," an RBL statement said.
RBL Bank, OPIC and the SME-focussed non-banking lender NeoGrowth have signed the agreement for the purpose. The statement said the agreement will help SMEs which face difficulties in getting loans owing to their small size, inadequate credit history and lack of collateral.

"This financing structure- leveraging OPIC's strengths and RBL Bank's local expertise - will enable Neogrowth to steadily lend to industries and segments that have good growth potential and enable these entities to grow to the next level," RBL managing director and chief executive Vishwavir Ahuja said.
Under the arrangement, Neogrowth will provide loans from Rs 2 lakh to Rs 75 lakh to SMEs.
OPIC president and chief executive Elizabeth Littlefield said it is committed to helping underserved small businesses gain access to the loans they need to grow their businesses.
"We were wondering how to mobilise additional resources to lend to our customers, and OPIC loan guarantee backed arrangement with RBL Bank will help extend our reach and serve many more customers," Piyush Khaitan, the founder and managing director of NeoGrowth, said.

He said half of small businesses here are denied credit using traditional credit-assessment.