HNB gets US $ 35mn DEG facility to beef up SME lending
16 September 2015 05:10 am
HNB PLC has entered into an agreement with the German Development Finance Institution DEG to raise US $ 35 million through a 6-year senior long term loan.
The funds raised would be utilized to finance the growth in the SME sector.
The agreement is the second between HNB and DEG to raise capital. HNB in 2012 obtained an eight year subordinated loan of US $ 25 million for the same purpose of funding SME sector growth.
This transaction is the second long term loan transaction signed by the bank with a prestigious international financial institution during 2015, the first being a US$ 100 million loan with Asian Development Bank (ADB) signed in March this year for funding infrastructure development in Sri Lanka.
The agreement was signed on behalf of HNB by MD/CEO Jonathan Alles and Director Rose Cooray while DEG Director Dr. Andreas Zeisler and Vice President Marina Dietz signed the agreement on behalf of DEG.
“HNB is delighted to enter into a second capital raising agreement with a financial institution of the stature of DEG. The funds raised will enable HNB to positively impact the entire eco system via the infusion of capital into the country’s engine of growth, the SME sector,” HNB MD/CEO Jonathan Alles said.
“HNB and DEG have been partners for more than three years now. We are proud to announce a further long-term financing for our valued partner, earmarked for its business operations with SME clients. In doing so, we contribute to strengthening the financial sector in Sri Lanka and to creating and safeguarding jobs,” said Andreas Zeisler, Director Financial Institutions Europe/Asia, DEG.
“SMEs have critical importance to the national economy. With its wide network, a comprehensive product range and solid expertise HNB has proactively positioned itself as a strong partner for SMEs,” he added.
DEG, a subsidiary of Germany’s KFW, is one of the largest European development finance institutions for long-term project and company financing.