Softlogic Finance obtains $ 4m loan

Softlogic Finance PLC has obtained $ 4 million (approximately Rs 504 million) from the Dutch Development Bank FMO that will take the form of a Subordinated Term Loan of five years, including an option to convert to equity in the company.

The funding will boost the Tier II Capital Adequacy of Softlogic Finance to over 16% as at FYE March 2013, in excess of the regulatory requirement of 10%.

Softlogic Finance entered into an agreement with FMO for a funding facility of $ 10 million in November of 2012 and received funds of the Senior Loan component of $ 6 million in December 2012.

With receipt of funds of the Subordinated Term Loan of $ 4 million, the full transaction of $ 10 million from initiation through documentation and disbursement has been completed in a short period.

"Softlogic Finance is only the third player from within the Non-Banking Financial Institutions category to receive funding from overseas Development Funding Institutions (DFI's) that is a reflection of the stability, track record and immense growth potential of the company," a spokesman for the company said.

"DFIs that lend in developing markets such as Sri Lanka require local lending institutions to maintain impeccable operating standards and adopt international best practices to secure funding. Softlogic Finance has specialist knowledge and expertise in the SME sector," he said.

Director and CEO of Softlogic Finance, Nalin Wijekoon said, "We are indeed happy to complete the transaction with FMO and have now received the full amount of the transaction of $ 10 million, around Rs 1.27 billion."

"We are privileged to have this relationship and will be using the funds to develop and uplift the SME sector in our country.

"Several issues continue to hamper the growth of the Sri Lankan SME sector; particularly the access to finance, and our objective is to provide SME's with the assistance they require for sustainable growth," he said.