Sri Lanka: SENIOR UNSECURED LOAN TO DFCC VARDHANA BANK LIMITED

Nonsovereign Project | 46912-014

Summary

ADB proposes to provide a senior unsecured loan of up to US$15 million to DVB with a tenor of 10 years for mortgage on-lending for purchases of new homes and rehabilitation of existing homes. ADB will also provide TA to strengthen and enhance the bank's mortgage lending capabilities through an existing R-CDTA (CDTA 7469).

Latest Project Documents

Consulting Notices

See also: CMS

No notices are currently available for this project.


Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.

The Public Communications Policy (PCP) recognizes that transparency and accountability are essential to development effectiveness. It establishes the disclosure requirements for documents and information ADB produces or requires to be produced.

The Accountability Mechanism provides a forum where people adversely affected by ADB-assisted projects can voice and seek solutions to their problems and report alleged noncompliance of ADB's operational policies and procedures.

In preparing any country program or strategy, financing any project, or by making any designation of, or reference to, a particular territory or geographic area in this document, the Asian Development Bank does not intend to make any judgments as to the legal or other status of any territory or area.

Project Name SENIOR UNSECURED LOAN TO DFCC VARDHANA BANK LIMITED
Project Number 46912-014
Borrower/Company DFCC VARDHANA BANK
Country Sri Lanka
Location Sri-Lanka
Approval Number 7359/2884
Type or Modality of Assistance
7359/2884 Loan USD 15.00 million Committed
Strategic Agendas
Drivers of Change
Sector / Subsector Finance - Banking systems and nonbank financial institutions - Housing finance
Gender Equity and Mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Stefan Hruschka
Project Sponsor(s)
Description ADB proposes to provide a senior unsecured loan of up to US$15 million to DVB with a tenor of 10 years for mortgage on-lending for purchases of new homes and rehabilitation of existing homes. ADB will also provide TA to strengthen and enhance the bank's mortgage lending capabilities through an existing R-CDTA (CDTA 7469).
Objectives and Scope The facility will be used exclusively for mortgage onlending and housing rehabilitation loans. ADB will restrict the use of its funds for owner-occupied residences and will target a minimum of 30% of the facility for loans outside Colombo in the North, East and tsunami-impacted areas.
Linkage to Country/Regional Strategy The investment supports institutional and financial sector development through the deepening of the financial sectors by the expansion of housing finance lending and technical assistance.
Status of Development Objectives The project is intended to contribute directly to an increased share of private commercial banks, especially tier two banks, in the housing finance sector in Sri Lanka, which is important given that state-owned banks have the dominant share of the market. Increasing the private sector's share of the housing finance market by supporting the growth of mid-tier banks, is expected to improve competition in the sector and lead to the development of competitive pricing and better products and services. Other indirect development impacts of housing finance include the contribution of the construction sector to overall economic growth and employment generation, through its many backward and forward linkages. In addition, mortgage lending capacity development though the TA will enable the bank to better expand and cater services more efficiently and sustainably, contributing to further economic growth.
Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects DVB's business activities have minimal or no adverse environmental impacts.
Involuntary Resettlement The project involves only small loans for purchase of existing homes or housing construction or small scale renovation for individual or family housing with insignificant impacts and no involuntary resettlement involved.
Indigenous Peoples The project will not be lending to estate developers, which may affect indegenous peoples as a community.
Stakeholder Communication, Participation, and Consultation
Timetable for assistance design, processing and implementation
Concept Clearance 09 Apr 2012
Due Diligence 29 Nov 2012
Credit Committee Meeting 21 Jun 2012
Approval 29 Aug 2012
PDS Creation Date 20 Jun 2012
Last PDS Update 30 Sep 2014

Safeguard Documents

See also: Safeguards

No documents found.

Evaluation Documents

See also: Independent Evaluation

No documents found.


The Public Communications Policy (PCP) establishes the disclosure requirements for documents and information ADB produces or requires to be produced in its operations to facilitate stakeholder participation in ADB's decision-making. For more information, refer to the Safeguard Policy Statement, Operations Manual F1, and Operations Manual L3.

Requests for information may also be directed to the InfoUnit.