The US International Development Finance Corporation (DFC) has approved fresh commitments of around $87 million to a bunch of private-sector lenders in India.
The American development bank, formerly known as OPIC, committed a bulk of the fresh commitment in the form of loan guarantees. It also approved a direct loan to Mumbai-based non-bank lender NeoGrowth Credit Pvt. Ltd.
The DFC will lend $10 million to fintech firm NeoGrowth to provide short-term loans to disadvantaged small businesses, helping increase financial inclusion.
NeoGrowth was founded in 2013 and counts Dutch social impact investor Oikocredit as a financial partner.
The company provides loans against future credit and debit card sales of small and medium-sized retailers who use point-of-sale swiping machines. The loans are a percentage of the card sales of a shop and have a duration of between six months and two years. Clients replay their loans as a percentage of their monthly card sales.
The DFC has also brought $77.5 million in the form of a loan portfolio guaranty to HDFC Bank and financial institutions Avanti Finance, Maanaveeya and Samunnati.
The DFC’s guaranty to HDFC Bank is in coordination with Mastercard and the USAID. It will enable India’s largest private-sector bank to provide $100 million in loans to small and medium-sized enterprises focused on women’s economic empowerment.
The guaranty to Avanti, Maanaveeya and Samunnati will support $55 million in loans to agricultural organizations and companies in India supporting farmers, agricultural technology, and clean energy solutions for agriculture.
These apart, DFC has approved a direct loan of $48 million to support microfinance and financial inclusion around the world, including in India, via MicroVest Enhanced Debt Fund.