ADB & HNB ink USD20Mn agreement to strengthen microfinance institutions

Oct 01, 2018 (LBO) – Hatton National Bank announced the signing of a new partnership agreement with the Asian Development Bank in order to expand lending and provide guarantees of up to 20 million dollars to support the development of Sri Lanka’s burgeoning microfinance sector. Currently, many microfinance institutions struggle to access funds for growth from the commercial market to meet the demands of clients. Only approximately 17 percent of women have access to formal financial services in Sri Lanka. Through this program, ADB and HNB aim to fill market gaps by sharing risks to promote local currency lending to these institutions. This will help mitigate microfinance institutions’ exposure to foreign exchange risks. Arranged under the ADB’s Microfinance Risk Participation and Guarantee Program, the agreement was signed by ADB Private Sector Financial Institutions Division Senior Investment Specialist Sabine Spohn and HNB Deputy General Manager - SME & Midmarket Jude Fernando at a formal ceremony in Colombo.