Sri Lanka’s oldest finance company, Alliance Finance Company PLC (AFC), has received the second tranche of USD 5 Mn from the Dutch Entrepreneurial Development Bank (FMO) as part of a long-term financing facility of USD 10M to expand its growing portfolio of MSME business.
AFC secured this USD 10 Million facility from the Dutch entrepreneurial development bank FMO in mid-2021 and received the first tranche of USD 5 Mn in 01.07.2021 With an investment portfolio of EUR 6.3 billion, FMO is one of the largest European bilateral private sector development banks with investments in 85 countries. This financing series is also a significant development for the country’s MSME sector, which is considered as the backbone of the economy.
Mr. Romani de Silva, Deputy Chairman & Managing Director of AFC stated: “This is an important milestone for AFC’s MSME focused business strategy and we are encouraged and excited by FMO’s partnership in our MSME plans. AFC-FMO partnership to develop the MSME sector in the country confirms AFC’s growing international credibility. Last year AFC became the first certified financial institution in South Asia for holistic sustainability in the Banking and Finance sector, governed under the EOSD International Council of Sustainability Standards for Value-Driven Financial Institutions (ICSSVDFI). FMO is no stranger to AFC since it assisted AFC with a similar facility in 2018. The facility is for 5 years with a fixed interest rate, thereby helping AFC to manage its asset and liability mismatch in the balance sheet. AFC readily receiving such global high tier financing is proof of international accreditation of our proven focus on sustainable financing which in turn is part of our larger commitment to the triple bottom line of People, Planet and Profit.”
In 2017, AFC became the first financial institution in Sri Lanka’s NBFI sector to commit to the UN’s Sustainable Development Goals (SDG) and Paris Agreement on Climate Change when it signed the ‘Karlsruhe resolution’. In recent years, AFC has been investing 3%-4% of its profits annually on social and environmental sustainability initiatives despite the extremely challenging external environment. In its initiatives beneficial to the environment and society, AFC has pledged LKR 18 Mn for sustainability initiatives during 2020/21 financial year.
Despite a challenging environment with the covid 19 pandemic, AFC has performed exceptionally well during the financial year 2020/21 with a commendable growth in PAT in comparison to the previous year. The Company once again proved its resilience to external shocks and delivered consistent performance in all key indicators reported in its latest quarterly Financial Statements released to the CSE. The Company reported a robust growth of 13.8% in Total assets surpassing Rs.38 Bn. and reported an NPL of 7.12% far below the published industry averages while reporting a total capital ratio of 14.95% well above the regulatory minimum of 11%. The promising financial performance is a result of a well-articulated business strategy, good leadership and the incorporation of best practices in the industry.
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 6.3 billion, FMO is one of the largest European bilateral private sector development banks.
About Alliance Finance Company PLC:
Incorporated in 1956, Alliance Finance Company (AFC) is Sri Lanka’s oldest Non-Banking Finance Institution (NBFI) in the country. It has served four generations of Sri Lankans for 65 years, and as Sri Lanka’s pioneering finance entity, it operates on the principle of Eternal Friendship. An enterprise that has been built on trust, integrity and a shared vision with its customers, Alliance Finance aims to make the world a better place through sustainable financing, and has garnered many prestigious awards and mentions on sustainability including the first Value Driven Financial Institution in South Asia to be Certified at Level 4 for Environmental and Social Sustainability in Banking and Finance. Becoming an ISO 22301 certified NBFI in 2012, Alliance Finance serves a diverse portfolio in Investment (Savings and Fixed Deposits) and Financing (Leasing, Equipment, Leasing, Speed Cash, Development Finance, Gold Loans, and Personal Loans) offers.