New Delhi, India, April 2, 2012
—IFC, a member of the World Bank Group, is providing $75 million to India’s Yes Bank to help the bank reach out to underserved poor people, small and medium enterprises, and agricultural clients as it expands its network in India.
This investment, in the form of a 15-year subordinated bond, will strengthen the bank’s capital base to help it grow its small and medium enterprise lending significantly, in addition to fostering transparency and financial discipline in the sector. Over 350,000 additional enterprises stand to benefit from the planned expansion, with Yes Bank aiming to increase its portfolio three-and-a-half times, to $7.7 billion, by 2016.
Nearly 80 percent of the population in India lacks adequate access to formal financial services, and only 30,000 of India’s 600,000 villages have a bank branch. Yes Bank is one of the few banks to provide such villages direct microfinance services, which is in line with IFC’s financial inclusion strategy.
“IFC’s support to Yes Bank will help strengthen our credit systems and processes, risk management and customer relationship management, and help us deliver more financial services to the target sector,” said Dr. Rana Kapoor, Managing Director & CEO of Yes Bank.
Micro, small and medium enterprises in India are constrained by lack of adequate management skills, modern technologies, industrial infrastructure and financial access. IFC seeks to bridge the financing gap and enhance the capacity of the sector. This funding comes at a time when there is little international private appetite for investment of this volume and tenor.
“IFC's investment and advisory support will help Yes Bank expand financial services to small and medium enterprises and the agriculture sector in an increasingly difficult credit environment,” said Karin Finkelston, IFC Vice President for Asia Pacific. “The project is aligned with IFC's strategy of promoting financial inclusion in South Asia by reaching out to those at the base of the pyramid.”
Yes Bank is a private sector bank that has differentiated itself by offering innovative financial solutions. Its knowledge banking approach uses technology for efficient low-cost delivery of products to build best in class domain expertise for various industries. In 2011, Yes Bank won the FT/IFC Sustainable Finance award for Sustainable Bank of the Year in the Asia-Pacific region.
About IFC
IFC, a member of the World Bank Group is the largest global development institution focused exclusively on the private sector. We help developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal 2011, amid economic uncertainty across the globe, we helped our clients create jobs, strengthen environmental performance, and contribute to their local communities - all while driving our investments to an all-time high of nearly $19 billion. For more information, visit
www.ifc.org
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