This loan will allow the private Sri Lankan bank DFCC Bank Limited to improve access to credit for SMEs, which are one of the main drivers for the country’s growth. The bank finances renewable energies and will also have long-term loans, which are not readily available on the local market.
DFCC Bank was set up in 1955 as a pioneering institution for development finance, in a number of new business sectors. It has now gained a reputation and recognized expertise in project and SME financing. It is today Sri Lanka’s 7th largest private bank.
The EUR 20m credit line will be used by the bank in a context of strong growth expected in the SME segments in which DFCC is seeking to strengthen its position. In addition, this credit line will allow PROPARCO to support an actor committed to renewable energy financing, thanks to this type of loan with a long maturity, which is not readily available on the local market. Finally, this financing will help the bank more effectively manage its maturity deadlocks.
The operation will support renewable energy development in Sri Lanka and is in line with the country’s aim of reducing its dependence on fossil fuels. The financing will also contribute to diversifying the range of financial products and to financing the private sector in the country. Finally, the project will contribute to job creation, both in the bank and in the other sectors supported by DFCC, particularly in the renewable energies sector.