LOLC transacts USD 247 mn loan for lending purposes


By Hiran H.Senewiratne

Sri Lanka's LOLC Group has borrowed US $247 million from three syndicated loans, led by FMO, a Dutch development agency, and the Asian Development Bank, for purposes of lending to its customers, officials said.

Minister of Finance Ravi Karunanayake said at the event that this was a landmark transaction marking the placing of confidence in the LOLC Group, due to proper governance. This project will greatly the assist the micro finance and the SME sector in the country.

He said that the micro and the SME sectors cover 73 percent of the economy. This loan scheme would enhance their contribution to the national economy in the medium and long-term perspectives.

The minister also said that the most efficient economic policies cannot completely eradicate the uncertainty that a country faces as borrowings from domestic and international markets are a necessity for economic progress.

Central Bank Governor Arjuna Mahendran said that the micro and SME sectors play a significant role in the development of the national economy.

A syndicated loan is an important landmark in Sri Lankan financial history and the country needs expertise, technology and knowhow for the development of the micro and SME sectors. The LOLC is assisting them in a big way, he said.

LOLC's chief executive Officer Kapila Jayawardene said it was the first time Middle Eastern banks were financing a non-bank lender in Sri Lanka.ADB is also giving another US $35 million to LOLC Micro Credit Limited. LOLC will also get technical assistance for capacity building.

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