World Bank’s IFC to provide million dollar loan to Sri Lanka’s Senkadagala Finance PLC to support its growth
The International Finance Corporation (IFC), which is a member of the World Bank Group, is reportedly investing US$ 7 million in Sri Lanka’s Senkadagala Finance PLC in order to support the growth of micro and small businesses across the country.
Senkadagala Finance (SFCL) has in filing to the Colombo Stock Exchange (CSE) also stated that the company entered into an agreement with IFC for a loan of up to US$ 15 million to grow its loan book and that the loan is to be denominated in Sri Lankan rupees.
The IFC’s funding will enable Senkadagala Finance to extend over 50,000 new loans to micro, small, and medium enterprises over a five-year period, reports state.
The loan will help Senkadagala Finance increase its presence in Sri Lanka, focusing on the northern and eastern regions. This is IFC’s first investment in a non-bank financial institution in Sri Lanka since 1999.
“IFC’s investment is timely, as we plan to expand our reach by opening 50 more branches and service centres across Sri Lanka over the next five years. It will also increase access to credit for micro and small businesses,” Director/Additional CEO of Senkadagala Finance, Sanath Bandaranayake has told the media.
Micro, small, and medium enterprises play an important role in Sri Lanka. In 2011, IFC estimates that the sector accounted for over 90% of all businesses in the country, and contributed nearly 52% to Sri Lanka’s Gross Domestic Product.
“Our investment in Senkadagala will create indirect employment, reduce poverty, and boost shared prosperity,” IFC Country Manager for Sri Lanka and Maldives, Adam Sack has told the local media. “Small businesses are critical to Sri Lanka’s continued growth and development, it is vital they have access to affordable financing options.”
Reports state that Sri Lanka is a priority country for IFC and that the IFC has a committed portfolio of over US$ 280 million in Sri Lanka that covers projects across a range of sectors, including infrastructure, tourism, renewable energy, finance, and healthcare. The loan agreement between the IFC and Senkadagala Finance PLC indicates the level of confidence international lending agencies have on Sri Lankan business enterprises. The IFC’s move to assist Senkadagala Finance would also present the opportunity for other businesses based in Sri Lanka to approach the IFC for financial assistance.
|Article Code :||VBS/AT/20180326/Z_4|