Shriram Transport Finance secures $250 million

CHENNAI: Shriram Transport Finance Co (STFC) has secured long-term funding of $250 million from the US International Development Finance Corp (DFC).

The 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, 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 and employment generation through MSME loans among others.

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.

Andrew Herscowitz, Chief Development Officer of DFC, said: “DFC’s investment in Shriram Transport Finance Co 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 decarbonise, by financing alternative fuel and lower-emissions vehicles.’’

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