MICROCAPITAL BRIEF: OPIC Loans $100m to IndusInd Bank for Microfinance Lending to Women in India

The Overseas Private Investment Corporation (OPIC), an agency of the US government that seeks to facilitate investment by US-based firms in developing countries, recently issued an eight-year loan in the amount of USD 100 million to India’s IndusInd Bank to increase its microenterprise lending to women. The loan is part of OPIC’s 2X Women’s Initiative, which was launched in March 2018 “to provide women in developing countries with access to leadership opportunities, quality employment, finance, enterprise support and products and services that enhance their economic participation.”

IndusInd, founded in 1994, is headquartered in the city of Mumbai. It has approximately 1,000 branches and 1,800 automated teller machines (ATMs) in the country as of 2018. The bank also has representative offices in London, England, and Dubai in the United Arab Emirates. As of March 2017, IndusInd reported total assets of INR 1.8 trillion (USD 28 billion), deposits of INR 1.3 trillion (USD 20 billion) and outstanding loans of INR 1.1 trillion (USD 17 billion). For the twelve months ending March 2017, it reported return on equity (ROE) of 15 percent and return on assets (ROA) of 1.9 percent.
For the 12 months ending March 2017, IndusInd reported having supplied microloans to approximately 2 million households. Following a loan from OPIC to IndusInd in June 2017, the bank reports that it “has increased its microfinance portfolio by USD 167 million and provided over 780,000 loans to women entrepreneurs.”

Established in 1971, OPIC is an agency of the US government whose function is to support investing by US-based firms in emerging economies. OPIC provides loans, grants, political-risk insurance and advisory services to US-based private equity funds; local financial institutions; and projects in the healthcare, energy, technology and education sectors. Its work has reached 160 countries since its inception. During 2017, the organization originated USD 3.8 billion in new commitments, mobilizing total capital of USD 6.8 billion and closing the year with 90 active projects.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

OPIC press release
https://www.opic.gov/press-releases/2018/opic-board-approves-18-billion-development-projects-across-four-continents

OPIC project detail
https://www.opic.gov/sites/default/files/files/9000072966.pdf

MicroCapital Brief; June 14, 2018; G7 Nations Triple OPIC Target, Pledge to Mobilize $3b for 2X Challenge for Women Entrepreneurs
https://www.microcapital.org/microcapital-brief-g7-nations-triple-opic-target-pledge-to-mobilize-3b-for-2x-challenge-for-women-entrepreneurs/

MicroCapital Brief; June 12, 2018; OPIC Loans $5m in Local Currency to Grameen Impact Investments India for SMEs
https://www.microcapital.org/microcapital-brief-opic-loans-5m-in-local-currency-to-grameen-impact-investments-india-for-smes/

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