Friday Nov 15, 2024
Friday Nov 15, 2024
Wednesday, 6 February 2013 00:46 - - {{hitsCtrl.values.hits}}
IFC, a member of the World Bank Group, is investing $75 million (approximately Rs 9.6 billion) in Commercial Bank to expand latter’s operations and increase access to finance for small and medium enterprises (SMEs).
This investment with Commercial Bank is IFC’s largest in Sri Lanka’s financial markets to date, and is expected to increase access to finance for up to 16,000 small businesses and generate about 170,000 direct and indirect jobs by 2017 through lending to small and medium enterprises.
The investment by IFC is through a fund managed by its Asset Management Company (AMC) and latter’s first funding in South Asia, and
 |
| Commercial Bank’s Managing Director and CEO Ravi Dias (left) and IFC Executive Vice President and CEO Dr. Jin-Yong Cai exchange the agreement |
the largest subordinated debt issued for any bank in Sri Lanka.
This investment through the AMC-managed IFC Capitalisation Fund will qualify as capital to help Commercial Bank expand its operations, allowing for small businesses across the country to gain better access to credit. The IFC Capitalisation Fund was established in 2009 by IFC and the Japan Bank for International Cooperation. It invests in banks considered vital to the financial system of emerging-market countries.
The investment will be via a 10-year subordinated loan to Commercial Bank that will also help bring in new foreign currency funding, and provide the Bank with capital to strengthen and expand its operations.
“This investment by IFC is much more than a milestone for Sri Lanka and Commercial Bank,” said Ravi Dias, the Bank’s Managing Director and CEO. “It will be a noteworthy infusion in to the national economy, given the significance of the SME sector. As Sri Lanka’s largest private bank, Commercial Bank is fully committed to exploring every possible opportunity to support post-conflict growth in the country.”
The investment is part of IFC’s efforts in Sri Lanka to promote economic inclusion by facilitating economic and financial integration across the country.
“This investment will help Commercial Bank expand financing options to the underserved – a key focus of IFC’s work in South Asia,” said Jin-Yong Cai, IFC Executive Vice President and CEO.
“The agreement also demonstrates Sri Lanka’s long-term potential as a destination for investment and should serve as a positive signal for international investors,” said Marcos Brujis, Head of the IFC Capitalisation Fund.
Sri Lanka is a priority country for IFC. IFC’s committed portfolio of $274 million in Sri Lanka covers projects across a range of sectors, including infrastructure, tourism, renewable energy, finance, and health care. IFC also provides advisory services to promote sustainable growth among small and medium enterprises by facilitating access to finance, and by offering capacity-building and training opportunities.
Commercial Bank is the largest private bank in Sri Lanka, and has the distinction of being the only Sri Lankan bank to be listed among the Top 1000 Banks of the World two years consecutively. The bank has been adjudged ‘Best Bank in Sri Lanka’ for 14 consecutive years by ‘Global Finance’ Magazine and has won multiple awards as the country’s best bank from ‘The Banker,’ ‘FinanceAsia,’ ‘Euromoney’ and ‘Trade Finance’ magazines.
IFC Capitalisation Fund is a $ 3 billion fund that invests alongside IFC in equity and subordinate debt investments in systemic banks and financial institutions throughout the world.
