The National Development Bank (NDB) disclosed that they have secured a long-term funding line of $ 75 million from the Development Finance Corporation (DFC) of the US to further the bank’s support for small and medium enterprises (SMEs) and infrastructure funding during these challenging times.
The US is providing a welcome boost to SMEs in Sri Lanka struggling with the impact of the pandemic. The DFC of the US is awarding a $ 75 million funding line to NDB to support its work in expanding and strengthening the SME sector. The DFC is the development finance institution of the US Federal Government, primarily responsible for providing and facilitating the financing of private development projects in lower and middle-income countries.
The funding line comes at a time when the country requires long-term, stable funding to help the economy recover from the effects of the pandemic. With its DNA deeply rooted in development banking, NDB is ideally placed to enhance the impact of the funding in conjunction with its flagship propositions “Jayagamu Sri Lanka” for uplifting entrepreneurship in SMEs and “Vanithabhimani” for uplifting women-driven businesses. Further, the investments the group is making in technology, including, but not limited to, virtual know-your-customer (KYC) and digital payment platforms, will improve financial inclusivity and enable SMEs to seamlessly transact with NDB.
These investments advance DFC’s development strategy, the “Roadmap for Impact”, and are part of DFC’s “2X Women’s Initiative” which aligns with NDB’s “Banking on Women” initiative aimed at improving financial inclusivity, gender equity, and supporting women-led organisations.
“DFC is proud of our investment in National Development Bank, a leader in SME and gender-lens investing in Sri Lanka,” said DFC Office of External Affairs Vice President and Global Gender Equity Initiatives Head Algene Sajery. “We applaud the NDB Group’s ongoing commitment to unlocking the full economic potential of women in Sri Lanka, both by ensuring women are employed by and in senior management positions in their own organisation, and by committing to lending a portion of DFC’s loan to businesses that are owned by women, led by women, or provide a product or service that empowers women.”
Speaking on this transaction, NDB Group CEO Dimantha Seneviratne said: “While this is not the first time NDB has raised significant foreign funding, this is the first time we are borrowing from a US-based development finance institution (DFI) whose development aspirations are aligned to that of NDB. Further, the timing of the facility cannot be better, coming at a critical juncture in the economy impacted by the third wave of the pandemic.” He further noted that NDB was at the forefront in supporting the SME sector in these challenging times, disbursing the fourth largest quantum of Saubaghya loans. This facility will help NDB support this vital sector of the economy with longer-term funding at their time of need. NDB recently tied up as the main banking partner for the “SL@100” initiative funded by the United States Agency for International Development (USAID), which promotes SMEs to upgrade to higher levels through strategic alignment initiatives.