SDB bank embarks on new growth path

From left: SBI Holdings Executive Vice President Arno de Vette, FMO Senior Investment Officer Private Equity Alwin B. Kool, SDB bank General Manager/CEO Nimal C. Hapuarachchi, SDB bank Chairperson Samadanie Kiriwandeniya, IFC Country Manager Sri Lanka and Maldives Amena Arif, SDB bank Senior Director Lakshman Abeysekara and SDB bank Head of Finance Terrance Kumara

Sanasa Development Bank PLC (SDB bank) has secured US $ 22 million (approximately Rs.3.3 billion) from international lenders through a private placement deal in order to expand its capital base to meet the regulatory requirements.
SDB bank shareholders’ consent was given at an extraordinary general meeting held on March 21, 2017 enabling the SBI-FMO Fund and International Finance Corporation (IFC), a member of the World Bank Group, to invest in the bank.
The regulatory approvals for these substantial investments have already been secured. SDB bank is the first licensed specialized bank to respond with an immediate strategy to expand its capital to meet the regulatory requirements. The new investment will increase IFC’s stake in the bank to 8.9 percent making them the fourth largest shareholder to date. 
IFC has been a long-term partner of SDB bank since 2009 and is currently supporting the bank’s expansion to include more micro and small businesses, co-operatives and retail clients. 
This will help the bank to reach more small businesses across the country, boosting financial inclusion. 
FMO is a Dutch development bank.  It is its mission to empower entrepreneurs to build a better world. FMO has an AAA rating with a stable outlook from both Fitch and Standard & Poor’s. 
It is a public-private development bank supervised by the Dutch Central Bank (DNB) with a clear governance structure and reporting lines.  FMO offers a dedicated facility to financial institutions to be on-lent to women-owned small and medium enterprises (SMEs).   Besides long-term finance for these businesses, they also provide technical assistance to support financial institutions and female entrepreneurs.  
The SBI-FMO Emerging Asia Financial Sector Fund Pte. Ltd (SBI-FMO Fund) is a growth strategy private equity investment fund based in Singapore, which invests in financial services and fintech sectors across Asia. The fund leverages on the combined strengths of the fund’s sponsors, SBI Group, a leading Internet-based financial services conglomerate in Japan and FMO Dutch Development Bank. 
The SBI Holdings Group is the leading online financial services conglomerate in Japan and one of the best performing Japanese private equity/venture capital asset managers with an AUM in excess of US $ 5 billion. FMO and SBI-FMO Fund will jointly take up a 12.9 percent equity stake in the bank. This breakthrough partnership will boost the capital base of the bank to be well within the regulatory limits.
In addition to the infusion of equity, FMO and SBI-FMO Fund will also jointly extend long-term Tier II funding of US $ 6.5 million (approximately Rs.1 billion) to support new business opportunities including SME lending, cooperative and retail sector. The bank has already made a substantial investment in organisation realignment, strengthening and improving systems and processes and is shifting to a digitalized environment with strong capabilities across these main business segments.
SDB bank GM/CEO Nimal C. Hapuarachchi stated, “With this new infusion of capital and long-term funding, we will consolidate on gains of past performances and proactively respond to future market requirements, in order to deliver strategic objectives.”
Chairperson Samadanie Kiriwandeniya said, “We are well geared both strategically and operationally to undertake the next phases of our journey. We have become a more focused business, striving for long-term, responsible growth that will amalgamate profitability with nation`s development.”  She further added, “Sanasa Development Bank, which is a product of the pioneering microfinance movement in Sri Lanka has been branded in the market over 20 years, as a leader in the microfinance industry. However, recent market studies and our own engagements with the customers led us to realize that our customers are ready to expand their frontiers and enter into real wealth creation.”
“IFC’s long-standing partnership with SDB bank is providing more formal financial services to underserved segments within rural micro and small businesses across Sri Lanka,” said IFC Country Manager for Sri Lanka and Maldives 
Amena Arif. 
“This investment will help the bank further extend their reach across the country.”
SBI-FMO Fund Fund Manager Suramya Gupta stated, “We are honoured to have partnered with Sanasa Development Bank in Sri Lanka.  Sanasa is a 100-year-old movement touching the lives of a large section of Sri Lanka`s population.”