IFC likely to extend $15m debt to Sri Lanka’s SDB to support SME lending

Coastal view of Sri Lanka at sunset.

The International Finance Corporation (IFC), the private lending arm of the World Bank Group, has proposed a debt investment of  $15 million to Sanasa Development Bank PLC (SDB), a licensed specialised bank in Sri Lanka, it said in its disclosure.

The local currency-denominated debt will be the first of its kind in the island nation.

The loan will support the expansion of the bank’s SME portfolio, with 25 per cent of the funds earmarked for women-owned SMEs. Currently, women entrepreneurs account for only 24 per cent of the SME sector as most of them run micro-enterprises.

“The project is expected to fund approximately 1,300 women-owned SMEs,” the filing said.

Started in 1997, Colombo-based SDB is funded by over 4,500 co-operative societies. The cooperative society stake now owns 29 per cent following stake dilution in favour of development finance institutions like IFC, Dutch development bank FMO and other investors.

Back in May 2017, SDB received a $28.5 million in equity and capital funding from its existing investors SBI-FMO Emerging Asia Financial Sector Fund, FMO and IFC.

This makes IFC hold a 8.86 per cent stake in SDB as of May 2017, an increase from 2.3 per cent previously.

Prior to that, in December 2016, SDB raised $48 million from FMO, SBI-FMO Fund and IFC through a private placement of ordinary shares.

Created by the Sanasa co-operative society movement as a microfinance/retail bank, it has been transformed into a SME/retail bank since 2015, two years after being listed on the Colombo Stock Exchange. To date, SDB has 91 branches and service centers across Sri Lanka.

“IFC will provide funding to approximately 5,000 SMEs over the next five years,” as stated in the announcement.

IFC’s study shows that latest loan support could create an estimated 1,500 to 4,650 direct jobs.

 Also Read:

Exclusive: SBI-FMO Fund, IFC infuse $28.5m in Lankan bank Sanasa

SBI FMO Fund invests in Singapore fintech startup Bank-Genie

SBI Holdings invests $10m in Indonesia’s Bank Index Selindo

 

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.