The consent of the shareholders of SANASA Development Bank PLC (SDB bank) was obtained at an Extraordinary General Meeting on March 21,2017 to enable SBI/FMO Fund and IFC, a member of the World Bank Group, to invest US $ 22 mn. (Rs. 3.3 bn.) in the Bank.
Regulatory approvals for these substantial investments have already been secured.
The new investment will increase IFC`s stake in the Bank to 8.9% making it the fourth largest shareholder to date. IFC has been a long-term partner of SDB bank since 2009 and is currently supporting the bank’s expansion to include more micro and small businesses, co-operatives, and retail clients. This will help the Bank to reach more small businesses across the country, boosting financial inclusion.
FMO is a Dutch Development bank. It offers a dedicated facility to Financial Institutions to be on-lent to women-owned SMEs.
They also provide technical assistance to support Financial Institutions and female entrepreneurs. The SBI-FMO Emerging Asia Financial Sector Fund Pte. Ltd. (SBI-FMO Fund) is a growth strategy private equity investment fund based in Singapore which invests in Financial Services and Fin Tech sectors across Asia.
The Fund leverages on the combined strengths of the Fund’s sponsors, SBI Group, a leading internet-based financial services conglomerate in Japan, and FMO Dutch Development Bank.
The FMO and SBI-FMO Fund will jointly take up 12.9% equity stake in the Bank. This breakthrough partnership will boost the Capital Base of the Bank to be well within the regulatory limits.
In addition to the infusion of equity FMO and SBI-FMO Fund will also jointly extend long-term Tier-2 funding of US $ 6.5 mn. (Rs. 1 bn. approx.) to support new business opportunities including SME lending, cooperative and retail sector.
The Bank has already made a substantial investment in organization realignment, strengthening and improving systems and processes, and is shifting to a digitalized environment with strong capabilities across these main business segments.
The GM/CEO Nimal C. Hapuarachchi said, “With this new infusion of capital and long term funding, we will consolidate on gains of past performances and proactively respond to future market requirements, in order to deliver strategic objectives.”
The Chairperson Ms. Samadanie Kiriwandeniya said, “SANASA Development Bank which is a product of the pioneering micro finance movement in Sri Lanka has been branded in the market over 20 years, as a leader in the micro finance sector.
However, recent market studies and our own engagements with the customers led us to realize that our customers are ready to expand their frontiers and enter into real wealth creation.”
IFC Country Manager for Sri Lanka and the Maldives, Amena Arif said, “IFC’s long-standing partnership with SANASA is providing more formal financial services to under-served segments within rural micro and small businesses across Sri Lanka.”
The Fund Manager for SBI-FMO Fund, Suramya Gupta said, “We are honoured to have partnered with SANASA Development Bank in Sri Lanka. SANASA is a 100-year-old movement touching the lives of a large section of Sri Lanka`s population.”