USD 55.5 million syndicated facility for LOMC
FMO Press Release
LOMC, one of the largest microfinance institution in Sri Lanka , has secured USD 55.5 million in a syndicated facility, marking the biggest microfinance syndicated facility ever. LOMC is a Specialized Leasing Company (SLC) with a unique market positioning. It operates in both microleasing and microfinance sectors in Sri Lanka.
LOMC is the main provider of access to finance for micro, small and medium companies mainly in rural areas with important expansion even to post-war areas. This transaction will benefit private sector growth throughout Sri Lanka.
The Netherlands Development Finance Company FMO acted as Mandated Lead Arranger and arranged a syndicate providing USD 55.5 million in financing consisting of FMO (with USD 15 million), PROPARCO, the private sector investment arm of Agence Française de Développement (USD 10 million), Cordiant (USD 12.5 million), BIO (USD 8 million) and the OPEC Fund for International Development OFID (USD 10 million).
“FMO is proud to be the Mandated Lead Arranger for this project. All lenders are very pleased to support this important private investment in Sri Lanka. This facility will enable LOMC to continue to grow the private sector in Sri Lanka. With our co-lenders we are pleased to work with investors who are committed to stimulate entrepreneurs to develop and grow the Sri Lanka economy,” said Nanno Kleiterp, CEO of FMO.
“PROPARCO is pleased to support a dynamic player like LOMC which shares our concern with Client Protection Principles. Putting clients first is, and should stay, a primary concern all along the financial value chain: from the biggest financial institutions down to the fields of microfinance. This financing is the third transaction with LOLC Group and is strengthening a partnership that started 8 years ago. PROPARCO also sees this transaction as a good example of cooperation between DFIs and private partners and praises in particular FMO for its role as arranger”, said Claude Périou, CEO of PROPARCO.
LOMC is a microfinance company providing small leases (average USD 990) for three-wheelers and agricultural equipment, gold loans and group loans to women. LOMC’s mission is to deliver integrated financial services to rural Sri Lanka, to support employments creation and income generation and promote gender equality. LOMC serves its clients with three different product lines: leases, gold lending and group lending. This model is different than the traditional, more ridged South Asian microfinance institutions since it serves the market with three different product lines. The company has ambitious growth plans and can focus on different products and so diversifying its portfolio. The major part of the portfolio consists of leasing of three-wheelers (40%) and tractors/light trucks and agricultural equipment (35%). The remaining part is gold backed lending (14%), loans to women-groups (8%) and a small part for two-wheelers (3%).
FMO (the Netherlands Development Finance Company) is the Dutch development bank. FMO supports sustainable private sector growth in developing and emerging markets by investing in ambitious entrepreneurs. FMO believes a strong private sector leads to economic and social development, empowering people to employ their skills and improve their quality of life. FMO focuses on three sectors that have high development impact: financial institutions, energy, and agribusiness, food & water. With an investment portfolio of EUR 6.2 billion, FMO is one of the largest European bilateral private sector development banks.
PROPARCO is a Development Finance Institution jointly held by Agence Française de Développement (AFD) and public and private shareholders from the North and South. Its mission is to catalyze private investment in emerging and developing countries with the aim of supporting growth, sustainable development and the achievement of the Millennium Development Goals (MDGs). PROPARCO ﬁnances investments that are economically viable, socially equitable, environmentally sustainable and financially proﬁtable. PROPARCO is one of the main bilateral development finance institutions in the world. It invests on four continents encompassing the major emerging countries and the poorest countries, particularly in Africa, and has a high level of requirements in terms of social and environmental responsibility. www.proparco.fr
BIO (the Belgian Investment Company for Developing Countries) supports financial institutions, investment funds, enterprises and private infrastructure projects. Endowed with capital of EUR 581.5 million, BIO provides tailored long-term financial products (equity, quasi-equity, debt and guarantees) either directly or through intermediary structures. BIO is able to fund technical assistance programmes for client companies as well as feasibility studies. BIO requires its business partners to implement environmental, social and governmental standards. BIO operates as an additional partner to the traditional financial institutions with a balance between return on investment and development impact.
The OPEC Fund for International Development (OFID) is the development finance institution established by the Member States of OPEC in 1976 as a collective channel of aid to the developing countries. OFID works in cooperation with developing country partners and the international donor community to stimulate economic growth and alleviate poverty in all disadvantaged regions of the world. It does this by providing financing to build essential infrastructure, strengthen social services delivery and promote productivity, competitiveness and trade. OFID’s work is people-centered, focusing on projects that meet basic needs – such as food, energy, clean water and sanitation, healthcare and education – with the aim of encouraging self-reliance and inspiring hope for the future.
Founded in 1999, Cordiant is a pre-eminent manager of emerging market, private sector investments. With more than USD 2 billion in capital subscriptions across five emerging market debt and equity funds, Cordiant counts amongst its clients some of the world’s largest institutional investors. Cordiant has been successfully investing across the emerging markets for a decade. From these regions ripe with opportunity, Cordiant offers institutional investors efficiently managed and cost effective access to high quality, income-generating investments with superior risk/return profiles throughout Asia, Eastern Europe, Latin America and Africa.