Source: Netherlands Development Finance Company (FMO).
Colombo, Sri Lanka, October 28 – Today Netherlands Development Finance Company (FMO) signed a deal with LOLC Micro Finance Company Ltd (LOLC MF), a new microfinance company in Sri Lanka. The company was set up by LOLC (Lanka ORIX Leasing Company PLC), one of the largest asset financing companies in Sri Lanka which has been a client of FMO for more than ten years. They recently decided to formalize their microfinance business. In order to seal this agreement, an official signing ceremony will take place in Colombo, which will be attended by the governor of the Central Bank and several ambassadors among others.
FMO invests USD 2 million in equity, a convertible loan of USD 1.5 million and a senior loan of USD 6.5 million. The Dutch development bank takes a 20 percent stake in LOLC MF, making this company the first MFI in Sri Lanka with foreign shareholding.
It is estimated that half of Sri Lankan households lack access to credit. The unmet demand for microfinance in Sri Lanka is approximately USD 1.2 billion. As a result of this new microfinance activity, entrepreneurs in the rural areas will gain access to finance. Besides providing microloans, LOLC MF is also involved in a number of outreach initiatives, like internet access to rural areas, supporting women entrepreneurs and internal staff trainings. LOLC’s 23 microfinance branches and 14 service centers are located in fuel stations. To further expand its outreach, LOLC MF wishes to increase this number and to also offer its products via the postal network. LOLC MF currently has around 20,000 customers and expects to have approximately 100,000 by the year 2010.
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