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HNB offers working capital loans for SMEs via ADB SMELoC - Emergency Response Scheme

Bandara Rekogama - Head of Refinance and Special Lending Products- HNB

Sri Lanka’s leading private sector bank HNB PLC was selected as a partner financial institution by the Asian Development Bank (ADB) to disburse a component of the US$ 13.5 million in funds allocated to the SME-Line of Credit (SMELoC) Emergency Response Scheme.  

The ADB scheme aims to support and strengthen Sri Lankan MSMEs affected by the ongoing economic crisis with working capital credit facilities, with a special emphasis on agriculture, tourism and export sectors.

In working towards this goal, HNB looks to disburse funds to select businesses across its extensive MSME network.

“We are delighted to be a part of this powerful initiative from the ADB. Given the unique strength and scale of HNB’s network of SME clients across the island, and our long-standing relationship with ADB, we believe that HNB is uniquely positioned to help uplift this sector, which even through our current challenges, continues to serve as the backbone of the Sri Lankan economy. We urge all eligible SME clients that are facing challenges in their working capital requirements to make use of this invaluable opportunity,” HNB Head of Refinance and Special Lending Products, Bandara Rekogama said.

SMEs that meet the eligibility criteria of a Rs. 750 million annual turnover will be offered a maximum facility of Rs. 10 million, with a repayment period of three years. All loans under the scheme must be utilised exclusively for working capital requirements, including recurring expenses such as salaries, overheads and raw material purchasing. Moreover, HNB will provide the attractive interest rates of 11.77% for the facility, significantly lower than the current market rates.

Notably, the bank has supported over 650 MSME customers with working capital and Capex facilities accounting for over Rs. 6.5 Bn through the ADB – SME LoC schemes. Established to support businesses affected by the COVID—19 pandemic, the Emergency Response Scheme initially disbursed USD 10 million to 280 local businesses as emergency working capital loans over the past two years.

Furthermore, HNB disbursed loans to the value of Rs. 600 million for approximately 132 women entrepreneurs with a grant of Rs. 100 million under the SME LoC – Wefi component.

With 254 customer centres across the country, HNB is one of Sri Lanka’s largest, most technologically-innovative banks, having won local and global recognition for its efforts to drive forward a new paradigm in digital banking. HNB has a national rating of AA- (lka) by Fitch Ratings (Lanka) Ltd. The bank was also ranked among the World Top 1,000 Banks list compiled by the prestigious UK-based Banker Magazine for six consecutive years, and was also ranked as Sri Lanka’s Best Retail Bank for the 12th year at the prestigious International Excellence in Retail Financial Services Awards 2022 hosted by the Asian Banker Magazine.