IFC to fund one state bank under SEDF

International Finance Corporation (IFC) will include at least one state bank for funding under the second phase of the South Asia Enterprise Development Facility (SEDF), said IFC Financial Markets Specialist Deva De Silva.

IFC, the private sector arm of the World Bank Group will hold the third banking road show on October 17 and 18 at the Samudi Reception Hall Ratnapura.

SEDF facilitates SME funding under a three-pronged strategy. The aim of the road show is to help Small and Medium Enterprises (SMEs) to access finance from banks. This is a unique opportunity for SMEs to meet the banks that are involved in financing small businesses, said De Silva.

The participating banks are Commercial Bank, DFCC Bank, Hatton National Bank, Nations Trust Bank, NDB Bank and Sampath Bank.

He said that SMEs find it difficult to obtain credit from banks due to structural weaknesses and the event will arrange consultations between banks and the SMEs. There will also be sessions on handling complex loan applications, preparing business plans, project proposals and establishing new banking products for SMEs.

The Sabaragamuwa Chamber of Commerce and Industry, The Export Development Board, Industrial Development Board and the Industrial Technology Institute will offer advice to entrepreneurs on the incentives, services and concessions available from their institutions. He said that road shows have been successful in Bangladesh and Vietnam while the earlier programs held in Sri Lanka were also very successful.

There is potential to even close deals at the workshop but our main aim is to support and help them.

Senior Manager, Development and credit Commercial Bank Delakshan Hettiarachchi said, at the Matara road show we got 58 potential customers and this is a welcome move as it has helped to create awareness on many aspects such as how to approach a bank and prepare a project proposal." He said that in most instances SMEs depend on informal lenders.

Since 1970 IFC has committed more than $200 mln for 26 projects in the country. IFC's current exposure is over $150 mln in equity, debt and guarantees with investments in private infrastructure exceeding $ 60mln.

In 2007 IFC committed more than $20 mln in new investments, including over $10 mln to local financial institutions under the IFC Global Trade Finance Program, with donor funding from the Netherlands and Norway.

IFC also provides advisory services to create a business enabling environment and support value addition to firms through capacity building programs, training and research.

SG