Apr 21, 2019

NTB to get IFC backed US$50m syndicated loan

Washington-base International Finance Corporation said it is planning to syndicate a 50 million US dollar loan for Sri Lanka's Nations Trust Bank.

The 5-year loan will have a 16 million dollars of IFC funds and 34 million dollars of parallel loans.

"The funds will be utilized by the Bank to fund its expansion in the SME (Small and Medium Enterprise) lending space, with the possibility of a portion being carved-out for lending to women-owned SMEs for which the bank will receive a performance incentive…" IFC said.

The proposal is to go to IFC's board on April 30.

NTB had already received a 50 million dollar loan from IFC in 2007.

Sri Lanka's central bank started targeting a real effective exchange rate index from around 2016 while also targeting inflation by printing money when consumer prices eased, leading to severe monetary instability and currency collapses.

The rupee has fallen from 130 to the US dollar in 2014 to 182 by end 2018, but has been allowed to appreciate to 174 to the US dollar after credit collapsed in January 2019, partly due to liquidity shortages generated by a capital flight from a political crisis that started in October 2018.