The funding received will boost the Tier II capital adequacy of Softlogic Finance over 16% as at FYE March 2013, well in excess of the regulatory requirement of 10%.
Softlogic Finance entered into an agreement with FMO for a funding facility of US$ 10 m in November of 2012 and received funds in respect of the senior loan component of US$ 6 m during December 2012.
With receipt of funds in respect of the subordinated term loan of US$ 4 m, the full transaction of US$ 10 m from initiation through documentation and disbursement has been completed in a remarkably short space of time.
Softlogic Finance is only the third player from within the non-banking financial institutions category to receive funding from overseas Development Funding Institutions (DFIs), which is a reflection of the stability, track record and immense growth potential of the company.
DFIs that lend in developing markets such as Sri Lanka require local lending institutions to maintain impeccable operating standards and adopt international best practices in order to secure funding.
Softlogic Finance has specialist knowledge and expertise in the SME sector, and this funding line will be utilised to develop relationships with customers who require financial assistance, to build their businesses and improve their livelihoods.
Softlogic Finance Director/CEO Nalin Wijekoon commented: “We are indeed happy to complete the transaction with FMO and have now received the full amount of the transaction of US$ 10 million, around Rs. 1.27 billion. We are privileged to have this relationship and will be utilising the funds to develop and uplift the SME sector in our country. Several issues continue to hamper the growth of the Sri Lankan SME sector, particularly the difficult access to finance, and it is hence our objective to provide our SMEs with the assistance they require for sustainable growth.”
Softlogic Finance PLC with an asset base that exceeds Rs. 12 billion provides finance leasing and hire purchase facilities and accepts fixed deposits and savings, personal finance, business finance and gold loans through a network of 17 branches that are located all round Sri Lanka, supplemented with 24 gold loan centres and marketing offices in Softlogic retail showrooms.
Softlogic Finance is part of the Softlogic Group that is one of Sri Lanka’s most diversified and fastest-growing conglomerates, with interests in healthcare, retail, ICT, leisure, automobiles and financial services. Softlogic Finance PLC is rated BBB-/P3 rating from RAM Rating with a stable outlook.
Softlogic Finance PLC is a licensed finance company under the Finance Business Act No. 42 of 2011 as well as a specialised leasing company licensed by the Central Bank of Sri Lanka under the Finance Leasing Act No. 56 of 2000. Further, the company became a public listed company by way of offer for sale of shares in December 2008.