LB FINANCE PLC
Status: Approved investmentWhy disclosure?
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In case of questions
In case of questions, please contact us at disclosure@fmo.nl
Disclaimer
The information as disclosed is indicative and provided on an "as-is/as available" basis for general informational purposes only and should not be construed as financial, legal or investment advice, nor as a commitment or an offer to arrange or provide any financing. The final decision to provide financing is subject to the terms and conditions of FMO in its sole and absolute discretion. When providing links to other sites, FMO bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links. The information on proposed investment for high-risk investments is made available in the language relevant to the country or region where the bulk of operations take place. Translations of any information into languages other than English are intended as a convenience for local stakeholders. In case of any discrepancy, the information provided in English will prevail.
Who is our customer
LB Finance is a regulated deposit-taking Non-Banking Financial Institution in Sri Lanka, which was incorporated in 1971. The principal activities of LB Finance include providing finance lease and vehicle loan facilities (together ca. 60% of the loan portfolio), next to offering gold loans, mortgage loans and other credit facilities to mainly MSMEs and some corporates and to individuals. LB Finance is a top-3 player in the Sri Lankan NBFI space and serves over 600,000 customers throughout Sri Lanka through a network of 169 branches/centres.
What is our funding objective?
The USD 15 mln Loan Facility granted by FMO to LB Finance will be used for the growth of LB Finance’s micro and SME loan/leasing portfolio and will be dedicated to on-lending to agri (75%) and youth clients (25%).
Why do we fund this investment?
With this Loan Facility, FMO supports a well-managed NBFI in Sri Lanka. LB Finance’s loan portfolio consists for a significant amount (ca. 90%) of loans to micro and SME clients, who, due to their perceived risk-profile, often encounter difficulties in obtaining loans from the larger banks. The loan is specifically dedicated to agri and youth clients and encourages the formalization and/or growth of SMEs and micro-enterprises in Sri Lanka. The loan therefore contributes to FMO’s Reducing Inequalities target.
What is the Environmental and Social categorization rationale?
E&S category C. Due to LB Finance’s relatively high exposure to Gold Lending, the Loan Facility will be accompanied by a Capacity Development program which will provide better insight into the end uses of the gold loans that LB Finance provides to their clients as well as adherence to best practices of Client Protection Principles.
- Website customer/investment
- https://www.lbfinance.com
- Region
- Asia
- Country
- Sri Lanka
- Sector
- Financial Institutions
- Effective date
- 4/21/2021
- Total FMO financing
- USD 15.00 MLN
- Funding
- FMO NV
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Risk categorization on environmental and social impacts, A = high risk, B+ = medium high risk, B = medium risk, C = low risk
Environmental & Social Category
(A, B+, B or C) - C