SMFG India Credit Secures $175 Million Foreign Loan

SMFG India Credit, a non-bank finance company, has raised USD 175 million via a foreign syndicated loan to support its lending operations. The loan was arranged by Standard Chartered Bank and CTBC Bank, and comes amid challenges in securing domestic funds. The facility is fully hedged against currency and interest rate risks.

SMFG India Credit, a non-bank finance company, announced on Tuesday its successful procurement of a USD 175 million foreign loan. This funding is intended to bolster its regular lending operations.

The loan was secured through a syndicate involving Standard Chartered Bank and CTBC Bank, according to an official statement from the subsidiary of Japan's SMFG, formerly known as Fullerton India Credit. This move aligns with the industry trend where companies have been leveraging the External Commercial Borrowing (ECB) route amid tighter domestic lending conditions.

Despite higher costs, accessing foreign loans has become a strategic choice due to regulatory changes and slower deposit growth in the domestic sector. The company has hedged the facility to manage foreign exchange and interest rate risks. SMFG India Credit's CFO, Pankaj Malik, emphasized the goal of enhancing their lending capabilities while maintaining a robust risk management strategy.

(With inputs from agencies.)