LOLC Micro Credit secures $ 55.5 m syndicated loan

LOLC Micro Credit Ltd (LOMC) secured a syndicated loan of $ 55.5 m. This long-term syndicated loan was facilitated by a consortium of Development Financial Institutions (DFIs) from around the world.

LOMC, the microfinance arm of LOLC Group, is one of the leasing companies that is exclusively dedicated for micro credit in the country.

Microfinance is not an uncharted territory for LOLC. With the initiation of the RERED project in 2003, LOLC has been involved in microfinance providing ‘bespoke’ products to grass root level entrepreneurs.

In 2009, LOLC created a microfinance institute with FMO as an international stakeholder which has a 20 percent stake in LOMC.

FMO (Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V.), the Dutch Development Bank, was the lead arranger to this transaction.

The other renowned participants include OFID (OPEC Fund for International Development), BIO (Belgian Investment Company for Developing Countries N.V.), PROPARCO (Société de Promotion et de Participation pour la Coopération Economique S. A. – the French Promotions Company for Economic Cooperation) and Cordiant Capital Inc. (a Canadian DFI engaged in investing in emerging markets).

“Cordiant made their maiden investment in Sri Lanka by participating in this syndicated loan. Most of these DFIs have a long standing relationship with LOLC. The Group has one of the largest range of external funding partners in the country, who work closely with the group in many endeavours,” a spokesman for LOMC said.

“FMO, plays a vital role in LOLC’s strategic thinking and has introduced many international standards over the last two and a half decades.

The confidence FMO has on the Group is further reflected by the fact that they are not only the equity partner of LOMC, but also an equity partner in the group’s overseas investment, PRASAC, a micro finance institution in Cambodia and are exploring similar opportunities in the region”, a spokesman for the Company said.