PR | OFID, OeEB and DEG team up to support Sri Lankan MSMEs through Seylan Bank PLC

Alpen Capital introduced this transaction to OFID, who in the context of the recent Cooperation Agreement between both development finance institutions, extended an invitation to OeEB.

Image Attribute: Back, left: Kapila Ariyaratne, CEO, Seylan Bank; OFID Director-General Suleiman J Al-Herbish; Ramesh Jayasekara, Chief Risk Officer, Seylan Bank. Front, left: Rena Terfruechte, Director of Finanacial Institutions Europe/Asia, DEG; Andrea Hagmann, member of OeEB’s Executive Board; Sabine Gaber, Manging Director Investment Finance, OeEB; Maria Spölgen, Vice President, DEG.

Vienna, Austria, April 11, 2017 - Seylan Bank PLC (Seylan) of Sri Lanka has signed a term loan agreement with the OPEC Fund for International Development (OFID), the Development Bank of Austria (OeEB) and the German development finance institution DEG—Deutsche Investitions- und Entwicklungsgesellschaft mbH—to promote development and economic growth through micro, small and medium enterprise (MSME) support in Sri Lanka. Alpen Capital introduced this transaction to OFID, who in the context of the recent Cooperation Agreement between both development finance institutions, extended an invitation to OeEB.

The agreement represents the first joint financing facility between OFID, OeEB and DEG. It provides term loan financing of US$45m for a five year tenor and is part of the first round of international fund-raising for Seylan.

Commenting on the agreement, OFID Director-General Suleiman J Al-Herbish said: “We need to work together and build effective partnerships. OFID welcomes this collaboration with OeEB and DEG to provide stable, long-term funding for Seylan, a leading bank in the country.”

Andrea Hagmann, Member of the Executive Board of OeEB also commented: “Together with OFID and as lead arranger for DEG we are able to support economic development especially in northern, rural regions of Sri Lanka. OeEB also contributes TA funds for enhancing environmental and social standards.”

Rena Terfrüchte, Director Financial Institutions Europe/Asia at DEG, expressed her gratitude to the due diligence teams of the organizations for closing the deal successfully. The loan will contribute to the overall development of the country´s economy through the financing of MSME companies, therewith meeting one of DEG´s central financing goals.

Development agencies, OFID, OeEB and DEG, are united in their commitment to achieving the Sustainable Development Goals (SDGs). SDG8, focuses on promoting sustained, inclusive and sustainable economic growth. MSMEs in Sri Lanka contribute an estimated 50 percent to GDP and 45 percent of employment, but typically lack access to long-term finance. Support to these businesses is therefore central to promoting inclusive and sustainable growth.

Seylan Bank, as one of the leading MSME banks in the country, is in an ideal position to support these goals. Seylan Bank CEO Kapila Ariyaratne commented: “SME growth is vital to Sri Lanka’s economic development and this agreement will help us plan for the longer term. I’m hopeful that it marks the beginning of an excellent relationship that will enable us to improve the sector, improve the livelihoods of our people and mutually benefit our organizations.”

Over one-third of the funding will support MSMEs in the northern and eastern provinces of Sri Lanka. These areas have been the most affected by the country’s civil war which ended in 2009. Despite strong economic growth and rapidly expanding urban populations, these regions continue to suffer from limited investment.

About OeEB

Oesterreichische Entwicklungsbank AG (OeEB) has been operating as the Development Bank of Austria since March 2008. It specialises in the provision of long-term finance for the implementation of private sector projects in developing countries which create sustainable development. Additionally, OeEB provides technical assistance, which can be used to enhance the developmental impact of projects. For more information, please visit www.oe-eb.at

About DEG

DEG is a reliable partner for private companies investing in developing and emerging-market countries. For more than 50 years, we have been promoting sustainable development that creates jobs, better living conditions, and new prospects. We are committed to the long-term success of our customers: Therefore we do not only provide long-term capital, but also individual advice and support. With a portfolio of around 8.6 billion euros in more than 80 countries, we are one of Europe’s largest development finance institutions for the private sector. More information: www.deginvest.de

About OFID

The OPEC Fund for International Development (OFID) is a multilateral development finance institution established in 1976 by the Member States of the Organization of the Petroleum Exporting Countries (OPEC). The primary aim of OFID is to contribute to the social and economic development of low-income countries. By the end of January 2017, OFID had committed over US$20bn in development financing to 134 countries spread across Africa, Asia, Latin America and the Caribbean and Europe.

About Seylan Bank

Seylan Bank was incorporated in 1987 and ever since has shown a steady expansion of business and has been identified as a systemically important bank by the Central Bank of Sri Lanka. Seylan Bank recorded a Profit after tax of Rs.4, 010 Million for the year ended 31st December 2016, which is the highest profit reported since its inception. The Bank remains well capitalized with a strong core capital adequacy ratio of 10.74% and total capital adequacy ratio of 13.18% as at 31st December 2016. In 2016, Fitch reviewed the Bank’s rating and reaffirmed the Bank’s rating at ‘A-lka’ with a ‘stable’ outlook. Seylan Bank’s network consists of 167 branches and 202 ATMs island wide. The bank is also an equal-opportunity employer, with 43 percent of its staff comprised of women. 

For further information please contact: OFID: media@ofid.org, OeEB: presse@oe-eb.at,  DEG: presse@deginvest.de,  Seylan Bank : tilanw@seylan.lk

Content provided by OFID, via Reuters.