December, 18, 2018
The Asian Development Bank (ADB) and DFCC Bank PLC (DFCC), a leading commercial bank in Sri Lanka, announced that a $35 million loan agreement signed recently between the two organizations would improve access to finance for the country’s micro, small, and medium-sized enterprises (MSMEs).
“MSMEs are an important part of the Sri Lankan economy, and to further boost their contributions to growth and development, it is crucial that they have sufficient access to finance,” said ADB Director of Private Sector Financial Institutions Ms. Christine Engstrom. “ADB’s loan to DFCC will open up these financing opportunities to MSMEs in Sri Lanka, providing more jobs and economic opportunities.”
“DFCC Bank is proud to once again partner with ADB to empower the MSME sector in Sri Lanka,” said DFCC Bank’s Executive Director and CEO Mr. Lakshman Silva. “This valuable credit line will help DFCC continue its mission to nurture small and medium businesses to scale up. The bank has deep domain expertise in the area of SMEs and I believe this ADB funding support comes at a crucial time in Sri Lanka’s economic growth.”
The agreement was signed by Mr. Silva and ADB Senior Investment Specialist Mr. Biao Huang at a ceremony in Colombo. The event was also attended by DFCC Senior Vice President, Treasury and Resource Mobilisation, Mr. Kapila Nanayakkara and Assistant Vice President, Treasury and Resource Mobilisation, Mr. Channa Dayaratne.
Nearly all enterprises in Sri Lanka are MSMEs, contributing a significant share of employment and gross domestic product. Access to finance for MSMEs, however, remains constrained, which stunts their growth and development. This is compounded by financial reporting quality issues of many MSMEs and a risk-averse culture among financial institutions.
ADB’s loan will enable DFCC to diversify its funding sources and have long-tenor funding to finance loans to MSMEs in Sri Lanka. A portion of the loan will be exclusively used to support MSMEs owned or managed by women, and at least 20% of ADB’s funding will be on-lent to businesses located outside Colombo.
DFCC Bank PLC is a fully-fledged commercial bank offering the full range of commercial and development banking services. The Chartered Institute of Management Accountants (CIMA) and the International Chamber of Commerce of Sri Lanka (ICCSL) has announced DFCC Bank as one of the ten “most admired companies” in Sri Lanka for 2018. Fitch Ratings Lanka Limited has rated DFCC AA- (lka).
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 67 members—48 from the region. In 2017, ADB operations totaled $32.2 billion, including $11.9 billion in cofinancing.