IFC, Nations Trust Bank support for SME development

IFC, the private sector arm of the World Bank Group, expanded its Global Trade Finance Program, with Sri Lanka's Nations Trust Bank (NTB) joining the program. IFC is providing NTB with a $5 million facility within its Global Trade Finance Program.

In addition, the IFC South Asia Enterprise Development Facility will assist the bank on a specific program for institutional capacity building that will help enhance the quality of service to the bank's SME clients.

IFC has had a relationship with NTB since the bank's inception in 1999 and was one of its initial shareholders. IFC also has had a long-standing relationship with the bank's promoters, the John Keells Group, since the mid-1990s.

The Global Trade Finance Program supports trade with emerging markets worldwide and promotes the flow of goods and services between developing countries. IFC provides partial or full guarantees against underlying trade instruments and covers the payment risk of participating issuing banks. The program allows issuing banks, such as Nations Trust Bank, to increase the volume and value of trade transactions, with enhanced tenors and access to competitive pricing terms.

IFC Regional Vice President for Asia and Latin America Farida Khambata said, "IFC's support to NTB fits in well with our strategy of partnering with financial institutions and banks that are committed to developing Sri Lanka's SME sector. The IFC Global Trade Finance Program will provide NTB with risk coverage in a difficult market and a global network that will assist the bank in undertaking trade finance deals.

Chief Executive Officer at NTB Zulfiqar Zavahir welcomed the partnership, saying, "We are delighted to extend our relationship with IFC through the Global Trade Finance Program. Nations Trust Bank will expand its network of correspondent banks and create new and valuable business opportunities for its clients in Sri Lanka and across the world.

In addition, through the capacity building program, we hope to adopt better risk management practices."

General Manager of IFC SEDF Anil Sinha said "We will collaborate with NTB in developing appropriate SME banking products and services and building their institutional capacity through training."

IFC's Country Manager for Sri Lanka and Maldives Gilles Galludec said, "The Global Trade Finance Program is an important mechanism to bring on board local banks to an active global network that facilitates transactions in challenging markets, promotes competitive financing, and builds correspondent bank relationships with new institutions on a low-risk basis."