Sri Lanka’s Hatton National Bank (HNB) recently entered an agreement with the Philippines-based Asian Development Bank (ADB) to enable up to USD 20 million in lending by HNB to Sri Lanka’s microfinance sector. The deal is part of ADB’s Microfinance Risk Participation and Guarantee Program, a “credit enhancement program designed to address a market gap by sharing risks to promote local-currency lending to MFIs [microfinance institutions].”
HNB is a private commercial bank that was founded in 1888 to serve Ceylon’s tea industry. It has since become a public limited company that offers traditional financial services as well as the Gami Pubudwa (Village Awakening) program, which includes financial literacy training and microfinance. As of 2017, HNB has LKR 955 trillion (USD 5.6 billion), customer deposits of LKR 702 trillion (USD 4.1 billion) and a gross loan portfolio of LKR 650 trillion (USD 3.8 billion).
The goal of ADB, which was established in 1966, is to eradicate poverty in the Asia-Pacific region. It is owned by 67 countries, of which 48 are located in the region. For 2017, the ADB had a total budget of USD 32.2 billion, including USD 11.9 billion in co-financing.
By Michelle Fleming, Research Associate
Sources and Additional Resources
ADB press release
https://www.adb.org/news/adb-hatton-national-bank-partner-provide-20-million-microfinance-sri-lanka
ADB Microfinance Risk Participation and Guarantee Program
https://www.adb.org/site/private-sector-financing/microfinance-program
ADB Microfinance Risk Participation and Guarantee Program extension
https://www.adb.org/projects/documents/reg-44934-016-rrp
ADB homepage
https://www.adb.org
HNB homepage
https://www.hnb.net
MICROCAPITAL BRIEF: Asian Development Bank (ADB) Lending $300m to Filipino Government for Infrastructure Supporting Financial Services in the Philippines
https://www.microcapital.org/microcapital-brief-asian-development-bank-adb-lending-300m-to-filipino-government-for-infrastructure-supporting-financial-services-in-the-philippines/
MICROCAPITAL BRIEF: Hatton National Bank of Sri Lanka to Acquire Majority Stake in Prime Grameen Micro Finance
https://www.microcapital.org/microcapital-brief-hatton-national-bank-of-sri-lanka-to-acquire-majority-stake-in-prime-grameen-micro-finance/
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