Sri Lanka : LOLC Finance and LOLC Micro Credit

Nonsovereign Project | 49188-001

Approximately 59% of Sri Lankans do not have access to credit. To improve access to finance for MSMEs and strengthen the leasing sector in Sri Lanka, a project consisting of (i) a senior loan of up to $25 million to LOLC Micro Credit Ltd. (LOMC) and (ii) a senior loan of up to $30 million to Lanka Orix Finance PLC (LOFC) is proposed. LOMC and LOFC are subsidiaries of Lanka Orix Leasing PLC (LOLC), a well-known, diversified company listed on the stock exchange with assets of over $1.65 billion._The loans will also target underserved geographical areas to promote greater access to finance.

Project Details

  • Project Officer
    Doukidis, Doukas
    Private Sector Operations Department
    Request for information
  • Country/Economy
    Sri Lanka
  • Modality
  • Sector
    • Finance
Project Name LOLC Finance and LOLC Micro Credit
Project Number 49188-001
Borrower / Company LOLC Finance PLC
LOLC Micro Credit Limited
Country / Economy Sri Lanka
Location Nation-wide
Type or Modality of Assistance
3323 Loan Ordinary capital resources USD 30.00 million Committed
3324 Loan Ordinary capital resources USD 25.00 million Committed
75 B-Loan Other USD 45.00 million Closed
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Knowledge solutions
Partnerships
Private sector development
Sector / Subsector

Finance / Small and medium enterprise finance and leasing
Gender Effective gender mainstreaming
Responsible ADB Department Private Sector Operations Department
Responsible ADB Division Portfolio Management Division, PSOD
Responsible ADB Officer Doukidis, Doukas
Project Sponsor(s)
Description Approximately 59% of Sri Lankans do not have access to credit. To improve access to finance for MSMEs and strengthen the leasing sector in Sri Lanka, a project consisting of (i) a senior loan of up to $25 million to LOLC Micro Credit Ltd. (LOMC) and (ii) a senior loan of up to $30 million to Lanka Orix Finance PLC (LOFC) is proposed. LOMC and LOFC are subsidiaries of Lanka Orix Leasing PLC (LOLC), a well-known, diversified company listed on the stock exchange with assets of over $1.65 billion._The loans will also target underserved geographical areas to promote greater access to finance.
Objectives and Scope The loan will provide critically needed longer tenor funding to MSMEs in Sri Lanka, whose ability to access funds has been constrained by the country's low level of finance sector development, including the absence of a well-developed capital market which limits availability of such funding, particularly for NBFIs._ADB financing will support longer tenor leasing products and also allow for recycling of shorter-term microloans.
Status of Development Objectives The project has already met the main output, outcome, and impact indicators defined in the design and monitoring framework.
Status of Operation/Construction Operation loan fully disbursed and repaying.
Linkage to Country/Regional Strategy Under the Midterm Review of Strategy 2020, ADB aims to strengthen its support for the finance sector by supporting the development of financial infrastructure, institutions, and products and services, and by promoting inclusive growth. Through such initiatives, ADB will continue to (i) help channel the region's savings into productive investments, and (ii) build the capacity of financial institutions by introducing international best practices. The proposed investment supports institutional and financial sector development through the deepening of the financial sector and the provision of funding for MSME onlending in urban and rural areas. Financial development will also be supported through the TA, which will strengthen the bank's onlending capacity (footnote 32). The project is also aligned with ADB's Gender Equality and Women's Empowerment Operational Plan, 2013-2020.
Safeguard Categories
Environment FI
Involuntary Resettlement FI
Indigenous Peoples FI
Summary of Environmental and Social Aspects
Environmental Aspects The investment is classified as category FI treated as C for impacts on the environment.
Involuntary Resettlement The investment is classified as category FI treated as C for impacts on involuntary resettlement.
Indigenous Peoples The investment is classified as category FI treated as C for impacts on indigenous peoples.
Stakeholder Communication, Participation, and Consultation The financial intermediaries will comply with national labor laws and, pursuant to ADB's Social Protection Strategy (2001), will take measures to comply with internationally recognized core labor standards. LOFC and LOMC will report regularly to ADB on (i) their compliance with such laws and (ii) the measures taken. Information disclosure and consultation with affected people will be conducted in accordance with ADB requirements. Proactive gender features are included in the project design to support the project's effective gender mainstreaming category.
Timetable for assistance design, processing and implementation
Concept Clearance 30 Jun 2015
Credit Committee Meeting 28 Sep 2015
Approval 19 Nov 2015
Last PDS Update 04 Oct 2022

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 Access to Information Policy (AIP) 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.

Title Document Type Document Date
Senior Loan to LOLC Micro Credit Ltd. for Broadening Access to Finance for Micro, Small, and Medium-Sized Enterprises: Extended Annual Review Report Extended Annual Review Reports Aug 2018
Senior Loan to LOLC Finance PLC Broadening Access to Finance for Micro, Small, and Medium-Sized Enterprises: Extended Annual Review Report Extended Annual Review Reports Aug 2018
LOLC Finance and LOLC Micro Credit: Report and Recommendation of the President Reports and Recommendations of the President Oct 2015
LOLC Finance and LOLC Micro Credit: Project Data Sheet (Tamil Translation) Translated PDS Mar 2016
LOLC Finance and LOLC Micro Credit: Project Data Sheet (Sinhala Translation) Translated PDS Apr 2016
LOLC Finance and LOLC Micro Credit: Initial Poverty and Social Analysis Initial Poverty and Social Analysis Jun 2015

Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.

None currently available.

Evaluation Documents See also: Independent Evaluation

None currently available.

Related Publications

None currently available.

The Access to Information Policy (AIP) 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.

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