National Development Bank PLC (NDB) has announced the strengthening of its strategic partnership with the International Finance Corporation (IFC), a member of the World Bank Group, to enhance its contribution to Sri Lanka’s banking and financial services sector. This collaboration, which dates back to 1998, will now cover a Risk Sharing Facility (RSF), a trade finance facility focusing on Small and Medium Scale Enterprises (SMEs), and an Advisory Engagement aimed at advancing Transaction Banking, Supply Chain Finance, and Climate Risk Management practices.
The RSF, soon to be operational, is part of IFC’s Small Loan Guarantee Program (SLGP). Under this program, IFC will share risks equally with NDB for all eligible facilities. Designed to support lending in agriculture value chains, SME exporters, and women empowerment, among other social causes, the program will include embedded advisory support from IFC. This support will enhance NDB’s ability to implement the facility effectively through targeted training initiatives, benefiting the bank’s SME clientele.
The second agreement involves a trade finance facility under IFC’s Global Trade Finance Program (GTFP). This unfunded facility is intended to guarantee NDB’s trade-related payment obligations, bolstering the bank’s international trade activities. Through this initiative, NDB will work with IFC’s trade finance experts, benefiting from IFC’s robust credit standing and technical expertise. The AAA-rated guarantees provided by IFC will offer high-quality risk mitigation to participating banks, reducing counterparty risk on covered trade transactions, optimizing capital use, and boosting the confidence of global correspondent banks in NDB. This will ultimately facilitate increased trade flows for NDB’s customers and expand market reach for SMEs and exporters.
In addition to financial support, NDB is entering a series of advisory initiatives. With backing from the Global SME Finance Facility (GSMEF), IFC will provide technical assistance to modernize NDB’s Transaction Banking and Supply Chain Finance operations. This partnership will enhance business operations, optimize working capital management within corporate value chains, and close the financing gap for SMEs, with a particular emphasis on women-led businesses. Additionally, with support from the Government of Japan, IFC will assist NDB in conducting a climate risk diagnostic and physical risk materiality assessment, laying the groundwork for a comprehensive climate risk management framework. This initiative will enable NDB to formally identify climate risk as a key risk category and integrate it into its overall risk management strategy, reinforcing the bank’s commitment to transparency, resilience, and sustainability.
Mr. Kelum Edirisinghe, Director/Chief Executive Officer of NDB, commented on the partnerships: “We are very pleased to further strengthen our existing partnership with IFC. NDB is currently on a strong growth momentum, having just embarked on its new strategic roadmap and charting its course towards an ambitious 2030. This further collaboration with IFC comes at this crucial juncture where the Bank’s efforts will be further augmented with IFC’s vast technical expertise and funding strength. The Bank will benefit from multiple fronts, including capacity building and knowledge enhancement for our staff on each of these distinct engagements, providing greater agility to support the needs of our SMEs more so in their now time of need and an enhanced ability to provide efficient and customized trade solutions for all our customers and, from a climate risk perspective, strengthen our related risk assessment capabilities. All in all, these tie-ups will collectively help NDB in its efforts to play a greater role in supporting the country’s SMEs and its sustained economic growth agenda and better position the Bank to deliver long-term sustainable value for the benefit of all its stakeholders including, amongst others, its customers and shareholders.”
Mr. Allen Forlemu, IFC Regional Director, Financial Institutions Group, Asia and the Pacific, stated: “When SMEs thrive, entire economies move forward. Access to capital remains a critical priority for Sri Lankan entrepreneurs, and our partnership with the National Development Bank is designed to address this by helping SMEs access the financing and the know-how needed to scale and grow. This reflects IFC’s long-term commitment to Sri Lanka’s economic revival and growth ambitions, underscoring the private sector’s role in driving inclusive progress.” This partnership, aligned with the World Bank Group’s priorities for Sri Lanka, aims to deliver targeted solutions for SMEs, helping businesses overcome challenges and supporting the country’s long-term economic resilience.
Photo caption: NDB’s Director/Chief Executive Officer, Mr. Kelum Edirisinghe, and IFC’s Regional Director, Financial Institutions Group, Asia and the Pacific, Mr. Allen Forlemu, exchanging the agreements between NDB and IFC.
