Chennai, India, September 29, 2003—
The International Finance Corporation, the private sector arm of the World Bank Group, has signed an agreement to provide a loan of 2 billion rupees (USD43.5 million equivalent) to Sundaram Finance Limited, India.
IFC’s loan will help the company broaden its funding base and support its operations. Sundaram Finance Limited’s increasing activity in southern India’s transportation sector, specifically in the area of commercial vehicle and automobile financing, constitutes an important part of the small and medium enterprise market.
Karl Voltaire, IFC’s Director for Financial Markets, sees IFC’s participation in this project as “part of the Corporation’s ongoing effort to assist India’s non bank financial institutions in meeting an increasing demand for high-quality, customer-focused financial services.”
According to Dimitris Tsitsiragos, IFC’s Director for South Asia, “Providing support for the development of a vibrant, sustainable private sector economy in Southern India is one of IFC’s key priorities in the region. Commercial vehicle finance has direct impact on market access for small and medium enterprises in rural and semi rural communities.”
Mr. T. T. Srinivasaraghavan, Managing Director of Sundaram Finance Limited, said, “We have been associated with IFC since the early 1980s. In January 2000, IFC made an equity investment in Sundaram Home Finance and also provided loan financing. We look forward to continuing our excellent partnership with IFC.”
Sundaram Finance Limited was founded in 1954 by T.S. Santhanam, a member of the T.V. Sundaram Iyengar family, which owns the TVS Group, one of India’s largest business houses with substantial interests in the automobile sector. SFL has traditionally been involved in providing financing for small road transportation operators in semi urban and rural areas. Over the years it has evolved into a financial services group catering to retail customers with housing finance, asset management, and general insurance.
The mission of IFC is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people's lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY03, IFC has committed more than $37 billion of its own funds and arranged $22 billion in syndications for 2,990 companies in 140 developing countries. IFC's worldwide committed portfolio as of FY03 was $16.8 billion for its own account and $6.6 billion held for participants in loan syndications.
With a portfolio of over $1 billion for its own account and $73 million for syndicated loan participants, India is IFC’s third largest investment destination. IFC’s investments in India are focused on the manufacturing sector (42 percent), the financial sector (29 percent) and infrastructure, including power and telecoms (17 percent). Within the financial sector, IFC has invested in a range of banks and non bank financial institutions to expand the availability of long-term financing to spur economic development, particularly in rural and semi rural areas.
