Apr 01, Colombo: International Finance Corporation (IFC), a member of the World Bank Group, is providing a US$125 million financing package to Sri Lanka's National Development Bank PLC (NDB) to expand access to finance for over 50,000 micro, small and medium enterprises over the next four years, IFC and NDB said in a joint statement.
The financing package includes a loan from IFC's own account of US$20 million, and US$105 million from Union National Bank of UAE, US$ 25 million each from HSBC and Standard Chartered Bank, US$ 15 million from Axis Bank, India and US$ 10 million each from Doha Bank, Qatar and Bank Muscat, Oman.
Additionally, another $70 million will be raised from other international developmental financial institutions by June 2014.
This is IFC's largest investment, as well as its largest syndication in the country. HSBC was the strategic advisor to the syndication.
"IFC's funding will add much-needed funding support to NDB's lending program, helping scale up our loan portfolio across the country. We are delighted to see how our partnership with IFC has progressively created significant value to our business model" said Rajendra Theagarajah, Director and Chief Executive Officer, NDB.
"The investment demonstrates NDB's ability to raise funds at rates that make commercial sense from global banks and institutions that have partnered IFC under this loan facility."
"IFC's syndication for NDB demonstrates growing investor confidence in Sri Lanka, and will help NDB expand financing options across the country for small and medium enterprises," said Adam Sack, IFC Country Manager for Sri Lanka and Maldives.
The 125 million US dollars had an average tenor of over 5 years and allowed the NDB to lend a part of the funds for up to 6-7 years.
"IFC's syndication for NDB demonstrates growing investor confidence in Sri Lanka, and will help NDB expand finance options across the country," Adam Sack, IFC's country manager said.
Last year, IFC extended a loan for $24 million to NDB to support the bank's growth plans generating employment opportunities and providing access to long term funding to small businesses.