Swiss fund manager lends $ 15 million to LankaBangla
The loan proceeds will be used to meet the financing needs of SMEs and green projects
LankaBangla Finance Limited, one of the leading non-bank financial institutions (NBFI), received a loan of $ 15 million from BlueOrchard Microfinance Fund, which is managed by a Swiss-based impact fund manager, BlueOrchard Finance Limited.
This is the second cross-border debt transaction for LankaBangla after receiving its first foreign funding in 2019 from the Islamic Corporation for Private Sector Development (ICD), a press release said.
Proceeds from the loan will be used to meet the financing needs of small and medium-sized enterprises (SMEs) and green and sustainable projects, as LankaBangla will focus on helping SMEs to recover from the effects of the Covid-19 pandemic.
It would be a great help for them to develop their businesses and create new jobs. Economic development takes place after the pandemic, the statement said.
For BlueOrchard, this is their first entry into the Bangladesh market and LankaBangla is the first Bangladeshi recipient institution to receive their funding.
BlueOrchard seeks to contribute to economic, environmental and social development and to improve access to financial services for people at the bottom of the pyramid as well as SMEs, mainly in emerging markets.
BlueOrchard Finance will continue to support financial institutions serving the needs of micro, small and medium enterprises and economic, environmental and social development more broadly, said Normunds Mizis, Director of Credit at BlueOrchard Finance.
âObtaining foreign currency loans is part of our corporate strategy to expand the range of borrowing, which will certainly help us control the cost of our funds to some extent. As we have received the fund at a competitive interest rate, we will be able to transfer the same benefit to our end clients, especially SMEs and emerging sectors, âsaid Khwaja Shahriar, Managing Director and CEO of LankaBangla Finance .
The transaction was arranged by Green Delta Capital Limited, which is also acting as security guard on behalf of BlueOrchard Microfinance Fund in this transaction.
Green Delta Capital Limited has always been excited to reach new heights and brought BlueOrchard on board for the first time in Bangladesh, where all due diligence was done digitally, said Md Rafiqul Islam, Managing Director and CEO of Green Delta Capital.
He also said that investing in LankaBangla from investors like Blue Orchard will also help unlock more foreign funding in Bangladesh.