IFC to lend half of $200-m support to Shriram Transport FinPTI | Mumbai | Updated: 25-07-2019 19:55 IST | Created: 25-07-2019 19:55 IST
The World Bank group member International Finance Corporation (IFC) will lend USD 100 million of the USD 200-million to support Shriram Transport Finance to finance truck purchases and small businesses. The development finance institution has already put in USD 41 million which is 50 percent of the first installment of USD 82 million, IFC said in a statement Thursday, adding it will facilitate a total of USD 200 million of funds for the truck financing company as part of the deal of it will chip in with 50 percent.
"IFC will put in half of the total amount, or USD 100 million, by itself, while the rest will be mobilised from partners," it said in a statement Thursday. The institution also said the first tranche of USD 82 million has already been disbursed, which has half the contribution from IFC, while the rest will be coming over a period of time.
"Commercial vehicles are an important engine for economic growth as they boost incomes and create jobs," Hemalata Mahalingam, a manager with IFC South Asia said. She said the securitisation structure, which entails a financier giving up on future receivables against payments in the present, is being adopted to funnel-in the money.
It can be noted that the announcement comes amid a severe stress which some of the non-banking lenders are undergoing, starting with the liquidity issues. Managing director and chief executive Umesh Revankar said there is a huge growth opportunity in small towns and the funds raised will be used to help small commercial vehicle operators and MSMEs in rural and semi-urban markets.
IFC said NBFCs are an important source of credit for transporters and MSMEs, which account for 31 percent of the GDP and 45 percent of exports. IFC, which made a USD 500-million commitment to L&T Finance earlier this month, said it has been supporting NBFCs since many years..