MICROCAPITAL BRIEF: OPIC Loans $5m in Local Currency to Grameen Impact Investments India for SMEs

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 loaned INR 355 million (USD 5 million) to Grameen Impact Investments India (GIII), a unit of Grameen Capital India (GCI) that lends to small and medium-sized enterprises (SMEs) in India. The loan, which is being intermediated by India’s IndusInd Bank, is for GIII to expand its lending “to high impact social enterprises in India in sectors including financial services, affordable healthcare, affordable education, renewable energy and sustainable agriculture.”

GIII is registered with the Reserve Bank of India as a non-banking financial company. GCI was formed in 2007 by the India-based Citicorp Financial India Limited, the US-based Grameen Foundation and India’s Institute for Financial Management and Research Trust. The organization supplies equity and debt financing to SMEs as well as advisory services to enterprises and investors in areas such as business planning, capital structure and market research. Since its inception through 2018, GCI has invested approximately USD 160 million via approximately 25 transactions.

IndusInd Bank, founded in 1994, serves both individual and corporate customers. Headquartered in the Indian city of Mumbai, it has approximately 1,000 branches and 1,800 automated teller machines (ATMs) in India as of 2018. The bank also has representative offices in London, England, and Dubai, United Arab Emirates. As of March 2017, IndusInd Bank reports 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 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, the bank reports having supplied microloans to approximately 2 million households.

Established in 1971, OPIC is an agency of the US government whose function is to support investing by US-based firms in emerging economies to “foster economic development.” 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. As of December 2017, it has 90 active projects, and since inception its work has reached 160 countries. During 2017, the organization originated USD 3.8 billion in new commitments, mobilizing total capital of USD 6.8 billion.

By Nicholas Galimberti, Research Associate

Sources and Additional Resources

OPIC press release
https://www.opic.gov/press-releases/2018/opic-provides-5-million-financing-grameen-impact-investments-india

GCI background
http://grameencapital.in/about.html

Grameen Foundation background
https://grameenfoundation.org/about

Grameen Foundation financials
https://grameenfoundation.org/sites/default/files/Grameen_FY17_FinancialStatement_12months_v2.pdf

IndusInd financials
http://www.indusind.com/content/dam/indusind/AnnualReports/2016-17/2016-17/23rd-annual-report-2016-17.pdf

OPIC background
https://www.opic.gov/who-we-are/overview

OPIC annual report
https://www.opic.gov/sites/default/files/files/OPIC-Annual_Report-2017_1.pdf

MicroCapital article; November 29, 2016; Grameen Foundation, Freedom from Hunger Announce Merger
https://www.microcapital.org/microcapital-brief-grameen-foundation-freedom-from-hunger-announce-merger/

MicroCapital article; March 31, 2014; Commercial Banks in India Seek to Expand Microlending: Housing Development Finance Corporation, IndusInd Bank, Industrial Development Bank of India (IDBI)
https://www.microcapital.org/microcapital-brief-commercial-banks-in-india-seek-to-expand-microlending-housing-development-finance-corporation-indusind-bank-industrial-development-bank-of-india-idbi/

MicroCapital article; March 8, 2018; Overseas Private Investment Corporation (OPIC) Commits $350m to Female Entrepreneurship, Women-led Private Equity Funds in Emerging Markets via 2X Women’s Initiative
https://www.microcapital.org/microcapital-brief-overseas-private-investment-corporation-opic-commits-350m-female-entrepreneurship-women-led-private-equity-funds-emerging-markets-via-2x-womens-initiative/