Shriram Transport Finance Company (STFC) has secured long-term funding of $250 million from the International Development Finance Corporation (DFC), the US government’s development finance institution
STFC is part of the Shriram Group and it is India’s largest commercial vehicle financer. It is getting the external commercial borrowing (ECB) as a fixed-rate 10-year loan under a social finance framework.
The company said the DFC funding will be used for vehicle financing for commercial purposes, alternate fuel financing, employment generation, loans for small businesses, specifically for women entrepreneurs and socially and economically backward communities in India. Besides the DFC loan, STFC has successfully raised $475 million through a 144A Bond from the international market during the start of 2022, thereby continuing to diversify its funding profile.
“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,” said Umesh Revankar, vice chairman and managing director at STFC.
“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,” said Andrew Herscowitz, Chief Development Officer of DFC.