Asian Development Bank lends $200M to Yes Bank

India’s fifth-largest private sector lender Yes Bank Ltd has raised $200 million in unsecured loan from regional development financial institution Asian Development Bank (ADB), as per a stock market disclosure.

The bank will use the money to lend the India rupee equivalent amount to finance working capital and investment loans targeted towards small farm households and rural women in Self Help Groups (SHGs).

"ADB's capital investment and technical assistance will provide sustainable finance to low income women and their families. In addition to income generation via female self-help groups, the project targets small farmers to allow them to benefit from agricultural value chains and enhance their productivity through better access to markets and investment finance," said Todd Freeland, director general, ADB Private Sector Operations.

It will additionally provide a capacity development technical assistance grant of up to $1 million which Yes Bank will use towards capacity building, improving the financial literacy of women borrowers and for leveraging Yes Leap programme for agriculture value chain integration.

"This significant commitment from ADB, reiterates our focus towards responsible banking and furthering the financial inclusion agenda in our country. Yes Bank has been a pioneer in rural banking through its award winning Yes Leap and Yes Money programme, and this loan from ADB will provide further acceleration as we aim to achieve our long-term goals of scaling our agribusiness and SHG loan growth," said Rana Kapoor, MD & CEO, Yes Bank.

Manila-based ADB is a regional development bank established to promote economic and social development in Asian and Pacific countries through loans and technical assistance.

It is also planning to lend $100 million to New Delhi-based solar power developer ACME Solar Energy Pvt Ltd.

Founded in 2004, Yes Bank is the fifth-largest private sector bank in India after ICICI Bank, HDFC Bank, Axis Bank and Kotak Mahindra Bank. It has a network of over 572 branches spread across 375 cities with more than 1,170 ATMs.

It was started by Rana Kapoor and his late partner Ashok Kapur along with Rabobank International. Over a period of time the bank has raised several rounds of equity.

In May this year, the bank raised $500 million (Rs 2,945 crore) from institutional investors in order to bolster its capital position.

Last year Yes Bank raised $150 million from International Finance Corporation, the private sector lending arm of the World Bank, to scale up its small and medium enterprise loan portfolio. Of the total amount, $45 million came through IFC’s co-lending programme while $60 million from IFC’s own account loan, both with up to seven years tenure. The remaining $45 million was a syndicated loan provided by Intesa Sanpaolo, Bank Muscat, Doha Bank and AKA Frankfurt for a tenor of two years.

(Edited by Joby Puthuparampil Johnson)

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