LB Finance proves its might by raising $15 m to support SME sector

LB Finance PLC (LBF) has succeeded in raising $ 15 million on a four-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 line for 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 SMEs to access much-needed financial assistance, in turn empowering the SME sector as a whole to play a more decisive role in national progress.

Commenting on the significance of the loan, LB Finance Managing Director Sumith Adhihetty said: “For a private sector organisation 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.” 

Speaking at the official signing, FMO Chief Investment Officer a.i. Huib-Jan de Ruijter 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 – amongst others – focus on best practices of client protection principles.”

LB Finance was incorporated in May 1971 and was listed on the Colombo Stock Exchange in 1997. Backed by a strong financial tradition of 50 years coupled with local experience, LBF offers a portfolio of financial solutions trusted widely by corporates, SMEs and individuals alike. Today, the company has an established, scalable, and a sustainable business model. As of 31 March, the company employed 3,606 men and women from Sri Lanka. With frequent recognition on multiple platforms, LB Finance is one of the most awarded financial institutions in the country. 

At the recently concluded SLIM Nielsen – People’s Choice, LB Finance was recognised as the Best Financial Service provider, making it the third consecutive year in which LBF has clinched this award. At the most recent (2019) edition of the CA – Sri Lanka Annual Report awards, LB Finance won the Gold award in the NBFI Sector (for the third consecutive year). Also, at the 2019 CA – Sri Lanka Annual Report awards, LB Finance was declared the overall third place winner.

In recent years, LBF has strategically expanded its operations beyond the shores of Sri Lanka to Myanmar, where the company has set up 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. As a leading impact investor, FMO supports sustainable private sector growth in developing countries and emerging markets by investing in ambitious projects and entrepreneurs. FMO believes that a strong private sector leads to economic and social development and has a 50-year proven track-record of empowering people to employ their skills and improve their quality of life.

FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food and water. With a committed portfolio of EUR 9.7 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. 

TSW Capital Services, renowned for its ability to provide trusted transaction advice, is a financial advisory firm based in India. The company shares an excellent affinity with a cross-section of enterprises across the world and provides advisory services primarily in the South Asian, South East Asian, and African markets.