Swedfund has committed an investment of USD 15 million in LB Finance, aimed at enhancing financial support for micro, small, and medium-sized enterprises (MSMEs) in Sri Lanka while promoting eco-friendly transportation solutions. This funding is anticipated to aid in job creation and foster the long-term development of the private sector.
Sri Lanka has encountered significant economic difficulties after enduring several years of financial turbulence, which has limited access to capital for both businesses and households. MSMEs are crucial to the nation’s employment and economic landscape; however, many of these enterprises struggle to obtain affordable long-term financing, especially in areas beyond the major cities.
Björn Areskog, Investment Director at Swedfund, stated, “Access to financial resources is vital for MSMEs to enable investment, expansion, and job creation. Given the current constraints on long-term funding in Sri Lanka, this investment aims to enhance financial availability for smaller enterprises while facilitating a shift towards more sustainable transportation options. LB Finance’s commitment to MSMEs and its extensive reach beyond Colombo will assist in serving businesses that are often neglected by traditional financial institutions.”
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This investment from Swedfund will empower LB Finance to broaden its lending activities to MSMEs throughout Sri Lanka, including support for rural businesses and those led by women.
A segment of the funds will be allocated for loans specifically intended for electric and hybrid vehicles utilized by MSMEs, which will help in minimizing emissions and promoting sustainable transportation alternatives.
In addition, Swedfund will lend its expertise to LB Finance in enhancing their systems for managing environmental and social risks, as well as in improving practices related to climate-focused lending.
