- Financing package is part of IFC’s US $ 8bn global COVID-19 fast-track financing facility
IFC, a member of the World Bank Group, is providing a US $ 50 million loan to Commercial Bank of Ceylon (ComBank), Sri Lanka’s largest private bank, to help small and medium businesses in the country deal with the adverse economic impacts of COVID-19.
The funding will be used to expand lending to small and medium-sized enterprises, with over a third dedicated to businesses owned by women.
The financing package is part of IFC’s US $ 8 billion global COVID-19 fast-track financing facility, which aims to help companies stay in business and
This investment comes under the working capital solutions programme of the facility, which provides US $ 2 billion in funding to emerging market banks to extend credit to help businesses shore up their working capital, so firms can pay their bills and workers.
The investment, which comes as IFC marks 50 years of work in Sri Lanka, will also help ComBank sustain its operations and support the economic recovery process.
“Over several decades, Commercial Bank has been a pioneer to provide financial solutions to support the small and medium business sector of the country, the backbone of the economy of Sri Lanka. We are grateful to the support of the IFC management and their team in Colombo and globally for responding positively to our request, as they have always done,” said ComBank Managing Director S. Renganathan.
“The funding package was decided after a series of evaluations by IFC teams located in different geographical locations and after showcasing ComBank’s genuine efforts to support SMEs, especially to women entrepreneurs and to SME exporters,” he added.
Small and medium-sized enterprises make up a large part of Sri Lanka’s economy, accounting for 80 percent of all businesses.
However, according to the World Bank’s South Asia Economic Focus, growth in the country is estimated to have been 2.6 percent in 2019, an 18-year low.
The COVID-19 pandemic is believed to have further weakened growth at the outset of 2020, with the loss of jobs and earnings in key economic growth areas in the country.
“As we face an unprecedented global crisis, it is imperative that the financing engines of the economy keep running. We are pleased to support our long-standing partner ComBank with liquidity at this time to do just that,” said IFC Country Manager for Sri Lanka and the Maldives Amena Arif.
“IFC’s rapid support will contribute towards helping businesses get through this challenging time. As we mark our 50-year partnership in Sri Lanka this year, we hope that our continued support will help businesses and their employees and suppliers through the immediate aftermath of the pandemic and restore the economy to a sustainable growth path,” she added.
Over the 50 years of IFC’s operations in Sri Lanka, ComBank has been one of IFC’s long-standing partners, dating back to 2003. IFC has supported ComBank through multiple investments as well as through advisory support and currently holds a 4.4 percent equity stake.