STFC raises USD 250 Million in long-term funds from the U.S. International Development Finance Corporation (DFC), the Development Finance Institution of the United States Government
· The funding will enable STFC to further its financial inclusion mission
India, June 9, 2022: Shriram Transport Finance Company Limited (STFC) India’s largest commercial vehicle financer and a part of the Shriram Group, secured long-term funding of USD 250 million from the U.S. International Development Finance Corporation (DFC) of the United States of America. The USD 250 million External Commercial Borrowing (ECB) is a fixed-rate 10-year loan under STFC’s Social Finance framework.
The funds raised from DFC, the development finance institution of the United States Government, will enable STFC to provide credit for the purchase of new and used vehicles throughout India. Proceeds from DFC can be used for the following: Vehicle finance for commercial purposes, alternate fuel financing namely through, CNG, LPG and electric vehicles, employment generation through MSME loans, specifically, finance women entrepreneurs, cater to laggard states of the country and empower and promote the social and economic status of the underserved communities in India.
Besides the DFC loan, STFC has also successfully raised USD 475 million through a 144A Bond from the international market during the start of 2022, thereby continuing to diversify its funding profile.
Speaking about the fund raise, Mr. Umesh Revankar, VC & MD, Shriram Transport Finance Company said, “STFC’s success in securing international funding from one of the world’s leading providers of development finance is a testament to our strength and stability, as well as an endorsement of our mission to further financial inclusion. We will help fund more individual operators to buy vehicles into new markets, provide funding towards employment generation in rural areas, and empower more communities to optimise their income and have a better quality of life.”
Speaking about the funding, Mr. Andrew Herscowitz, Chief Development Officer of DFC said, “DFC’s investment in Shriram Transport Finance Company is helping boost economic growth, development, and financial inclusion across India. DFC’s financing helps increase access to finance for owner-operators and other small businesses to purchase commercial vehicles—including business owners from rural and underserved communities. With DFC’s loan, STFC will also help to green India’s commercial transport sector, a notoriously difficult sector to decarbonize, by financing alternative fuel and lower-emissions vehicles.”