DEG provides $21 m loan facility to NDB Bank for SME sector

NDB Bank received a long-term loan facility amounting to USD 21,000,000 from DEG - Deutsche Investitions- und Entwicklungsgesellschaft mbH, Germany, to support NDB Bank's long-term commitment to finance the SME sector in Sri Lanka.

The loan agreement was signed in Colombo recently by Russell de Mel, Chief Executive Officer NDB Bank, and Bernd Tuemmers, Senior Vice President DEG.

DEG, member of KfW Bankengruppe, is one of the largest European development finance institutions for long-term projects and company financing.

For almost 50 years, DEG has been financing and structuring investments of private companies in developing and transition countries.

DEG invests in profitable projects that contribute to sustainable development in all sectors of the economy, from agriculture to infrastructure and manufacturing to services. It also focuses on investments in the financial sector in order to facilitate reliable access to capital locally.

To date, DEG has worked together with more than 1,600 companies and has contributed with its own financing commitments of more than 11 billion euros to providing an investment volume of 70 billion euros.

NDB which was a traditional Development Finance Institution (DFI) has transformed itself into a universal bank having acquired ABM Amro's business in Colombo in 2001 and merging with it in 2005.

In addition to project loans, it offers all banking products and services to corporates, SMEs and retail customers through its network of 55 branches islandwide.

Today, NDB positions itself as a unique banking group with its presence in Capital Markets, which includes investment banking, stock broking and fund management and also in insurance with its venture with Aviva NDB Insurance.

It also operates a leasing company in the Maldives and an investment bank in Bangladesh.

"While aggressively marketing our deposit and savings products, we will actively diversify our sources of funding by entering the debt market and sourcing finance on the strength of our own balance sheet , from sources internationally such as DEG, which will support our asset strategy", said Nilam Jayasinghe, NDB Bank's Vice President, Finance Planning and Treasury.

Jayasinghe also said that during the first half of this year, loans and advances had grown by 23 percent which is well over the industry, while maintaining strong asset quality which is probably one of the lowest in the industry. Currently NDB is rated AA (lka) by Fitch Rating and enjoys a, "stable" outlook.

NDB Bank has been working with businesses in the SME sector for over 25 years, acting also as an apex agency to channel lines of credit from international sources, financing over 35,000 projects directly and indirectly.

This new five-year long-term loan facility, will enable NDB Bank to enhance its lending to priority sectors, and support the Government's effort to reach its economic goals which include doubling per capita GDP over the next three to five years.