IFC likely to extend $15M debt to Sanasa Development Bank

  👤  3354 readers have read this article !
By 2018-02-14

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

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, the release added. 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 report 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, Netherlands Development Finance Company (FMO), and other investors. Back in May 2017, SDB received a US$ 28.5 million in equity and capital funding from its existing investors, SBI-FMO Emerging Asia Financial Sector Fund, FMO and IFC. This gives IFC 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 US$ 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 centres 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 1,500-4,650 direct jobs.




Read More


Read More


Read More


Read More


Read More