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Wednesday, October 4, 2023

LB Finance raises USD 15 mn to support SME sector

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LB Finance PLC (LBF) has succeeded in raising USD 15 million on a 4-year tenure from FMO, the Dutch Entrepreneurial Development Bank. TSW Capital Services, a financial advisory firm based in India was the lead arranger of the deal.

The loan marks a number of historical milestones for LBF not only does it coincide with the Company’s 50th anniversary, it also signals a new chapter in LBF’s commitment to the nation.The loan would be used to create a dedicated funding linefor the SME segment. Often overlooked by the formal banking channel, Sri Lanka’s SME sector has long been handicapped by the lack of adequate funding. LBF’s new funding line will help bridge this gap by enabling SME’s to access much needed financial assistance,in turn empowering the SME sector as a whole to play a more decisive role in national progress.

Sumith Adhihetty, Managing Director of LB Finance PLC said, “ For a private sector organization to be able to secure a long term funding of this nature at a time when Sri Lanka too is shopping for foreign funds, is a laudable achievement that testifies to LBF’s credentials and proven track record for excellence in all spheres of the business. More importantly, I believe the new loan paves the way for LBF to achieve its ambitions of playing a broader and more dynamic role in promoting financial inclusion within Sri Lanka’s SME sector over the next few years. Huib-Jan de Ruijter, Chief Investment Officer a.i. at FMO stated: “Supporting LB Finance is supporting financial inclusion. The company is able to provide loans to micro- and SME clients who are often perceived as too risky by larger banks. Furthermore, the loan will be specifically dedicated to agri- and youth clients, contributing to reducing inequalities within Sri Lanka.

The accompanying Capacity Development program will – among others –focus on best practices of Client Protection Principles.’’In recent years, LBF has strategically expanded its operations beyond the shores of Sri Lanka to Myanmar, where the Company has setup seven branches in the Bago and Migway regions with a view to promoting financial inclusion and bringing prosperity to the people of Myanmar as well.FMO is the Dutch entrepreneurial development bank.

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