<article><a style="font-weight: bold;" href="https://www.dealstreetasia.com/?s=International%20Finance Corporation">International Finance Corporation</a> (IFC), a member of the <a href="https://www.dealstreetasia.com/?s=World%20Bank Group">World Bank Group</a>, is considering a proposal to provide a loan of up to $50 million to Sri Lankan mid-sized private commercial bank <a href="https://www.dealstreetasia.com/?s=Nations%20Trust Bank">Nations Trust Bank</a> (NTB).</article>

<a style="font-weight: bold;" href="https://www.dealstreetasia.com/?s=International%20Finance Corporation">International Finance Corporation</a> (IFC), a member of the <a href="https://www.dealstreetasia.com/?s=World%20Bank Group">World Bank Group</a>, is considering a proposal to provide a loan of up to $50 million to Sri Lankan mid-sized private commercial bank <a href="https://www.dealstreetasia.com/?s=Nations%20Trust Bank">Nations Trust Bank</a> (NTB).
According to a disclosure, the investment proposal entails an A loan of up to $16 million and mobilization via non-agented parallel loans of up to $34 million for NTB, which is an existing IFC client.
An A-loan is an exposure management tool that IFC uses to reduce its risk exposures to a client, country, or sector.
IFC was a founder shareholder of NTB when it has established in 1999 but it divested its stake in 2004. In 2017, IFC granted a senior loan of $50 million to the bank for on-lending to SMEs.
NTB, listed on the Colombo Stock Exchange, has 94 branches spread across Sri Lanka. Its major shareholders are <a href="https://www.dealstreetasia.com/?s=John%20Keells Holdings Group">John Keells Holdings Group</a> and <a href="https://www.dealstreetasia.com/?s=Central%20Finance Company PLC Group">Central Finance Company PLC Group</a>, which hold 29.9 per cent and 20 per cent of voting shares, respectively.
Other large shareholders of NTB include <a href="https://www.dealstreetasia.com/?s=HWIC%20Asia Fund">HWIC Asia Fund</a> of Fairfax Group (15 per cent) and <a href="https://www.dealstreetasia.com/?s=Janashakthi%20Insurance">Janashakthi Insurance</a> (9.8 per cent).
For the proposed $50-million funding, the IFC said NTB will use it to fund its expansion in the SME lending space, with the possibility of a portion being carved-out for lending to women-owned SMEs (WSMEs).
&#8220;The financing provided is a fit with the World Bank and IFC strategy of promoting economic growth by providing access to finance to underserved market segments,&#8221; the IFC said.
The Washington-based impact investor said an estimated 56,000 MSMEs lack access to adequate finance in Sri Lanka. The project, the IFC added, will indirectly provide funding to SMEs over the next five years.
In Sri Lanka, nearly 91 per cent of corporate entities operate in the SME segment, which is seen as one of the key growth drivers for the country’s economy.
The funding will also help reduce the formal financing gap for WSMEs, which the IFC estimated to be at $416 million, and eventually create both direct and indirect jobs in the country.
Last year, the IFC also approved a $50-million loan to Colombo-listed National Development Bank to support financial access to agriculture-related MSMEs.
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The investment proposal entails an A loan of up to $16 million and mobilization via non-agented parallel loans of up to $34 million.

IFC mulls $50m loan package for Sri Lankan mid-sized lender

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IFC mulls $50m loan package for Sri Lankan mid-sized lender

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