MICROCAPITAL BRIEF: LOLC Microcredit Limited of Sri Lanka Receives $55m Syndicated Loan Funds from FMO, OPEC Fund for International Development, PROPARCO, Cordiant Capital
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Thursday, January 10, 2013

MICROCAPITAL BRIEF: LOLC Microcredit Limited of Sri Lanka Receives $55m Syndicated Loan Funds from FMO, OPEC Fund for International Development, PROPARCO, Cordiant Capital

Lanka Orix Leasing Company (LOLC) Micro Credit Limited, the microfinance arm of Sri Lankan financial service provider LOLC, has received a five-year syndicated loan of USD 55.5 million. The Nederlandse Financierings-Maatschappijvoor Ontwikkelingslanden NV (FMO), a Dutch public-private development bank that holds a 20-percent share in LOLC Micro Credit, was the lead arranger for the transaction. Financial institutions contributing to the loan include the Organization of the Petroleum Exporting Countries (OPEC) Fund for International Development, a multilateral development finance institution based in Vienna; Societe de Promotion et de Participation pour la Cooperation Economique SA (PROPARCO), a French public-private development finance institution; and Cordiant Capital, a Canadian investment company. The amount committed by each organization is unavailable.

While financials for LOLC Micro Credit also are unavailable, LOLC reports total assets of LKR 145 trillion (USD 1.12 trillion) and deposits of LKR 25 trillion (USD 197 billion) as of March 2012. LOLC was founded in 1980 by the World Bank Group’s International Finance Corporation (IFC), the Sri Lankan government and Japan’s Orix Corporation.

In 2011, FMO reported total assets of EUR 5.06 billion (USD 6.53 billion) and EUR 2.59 billion (USD 3.34 billion) in net loans. As of year-end 2011, OPEC Fund for International Development reported total disbursements of USD 8.82 trillion. In 2010, PROPARCO disbursed EUR 2.1 billion (USD 2.7 billion) for 70 projects in 28 countries. Financial information for Cordiant Capital is unavailable.

By Charlotte Newman, Research Associate

About LOLC Micro Credit Limited
LOLC Micro Credit Limited provides individual and group loans for microentrepreneurs in Sri Lanka’s agricultural districts. Founded in 2009, LOLC Micro Credit is the microfinance arm of Lanka Orix Leasing Company (LOLC), a Sri Lankan financial services provider launched in 1980 by the World Bank Group’s International Finance Corporation, the Sri Lankan government and Japan’s Orix Corporation. While financials for LOLC Micro Credit are unavailable, LOLC reports total assets of LKR 145 trillion (USD 1.12 trillion) and deposits of LKR 25 trillion (USD 197 billion) as of March 2012.

About the Netherlands Development Finance Company (FMO)
The Netherlands Development Finance Company (FMO) is a public-private development bank that supports financial institutions and countries through “loans, participations, guarantees and other investment promotion activities.” It was founded in 1970 by the “Dutch government, private sector, employers and employee organizations.” It has access to government funds and therefore can take higher risks with its investments including long-term finance. It also specializes in local-currency finance. In 2011, FMO reported total assets of EUR 5.06 billion (USD 6.53 billion) and EUR 2.59 billion (USD 3.34 billion) in net loans.

About the OPEC Fund for International Development
The OPEC (Organization of the Petroleum Exporting Countries) Fund for International Development, initially founded in 1976 as the OPEC Special Fund, is a multilateral development finance institution based in Vienna. The mission of the OPEC Fund for International Development is to foster relationships between developing countries, work to eradicate poverty, finance development through grants and loans. As of year-end 2011, OFID reported total disbursements of USD 8.82 trillion.

About PROPARCO
Established in 1977, Société de Promotion et de Participation pour La Coopération Economique (PROPARCO – The Investment and Promotions Company for Economic Cooperation) is a development finance institution based in Paris, France, that is jointly held by private shareholders and the Agence Francaise de Developpement (AFD), an institution of the French government. PROPARCO’s mission is “to be a catalyst for private investment in developing countries which targets growth, sustainable development and reaching the United Nation’s Millennium Development Goals (MDGs).” In 2010, PROPARCO disbursed EUR 2.1 billion (USD 2.7 billion) for 70 projects in 28 countries.

Sources and Additional Resources:

LOLC Microcredit Press Release: “LOMC Secures Sri Lanka’s Largest Syndicated Loan of USD 55.5mn,” http://www.lolcmicrocredit.com/lomc_secures_sl_largest_syndicated_loan_of_usd_55.5_mn.php

Lanka Business Online: “Sri Lanka LOLC Gets US$55.5mn for Microcredit,” http://www.lankabusinessonline.com/fullstory.php?nid=1248576381

MicroCapital.org story, December 8, 2012, “MICROCAPITAL BRIEF: responsAbility Social Investments Disburses $14m to LOLC Micro Credit Limited of Sri Lanka,” http://www.microcapital.org/microcapital-brief-responsability-social-investments-disburses-14m-to-lolc-micro-credit-limited-of-sri-lanka/

MicroCapital.org story, April 13, 2011, “MICROCAPITAL BRIEF: BlueOrchard Loans $3m to Microfinance Institutions (MFIs) AccessBank of Tajikistan, LOLC Micro Credit Limited (LOMC) of Sri Lanka,” http://www.microcapital.org/microcapital-brief-blueorchard-loans-3m-to-microfinance-institutions-mfis-accessbank-of-tajikistan-lolc-micro-credit-limited-lomc-of-sri-lanka/

MicroCapital Universe Profile: LOLC Micro Credit Limited
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=LOLC+Micro+Credit+Ltd.+%28LOMC%29

MicroCapital Universe Profile: Netherlands Development Finance Company (FMO)
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Nederlandse+Financierings-Maatschappijvoor+Ontwikkelingslanden+N.V.+%28Netherlands+Development+Finance+Company%2C+FMO%29

MicroCapital Universe Profile: OPEC Fund for International Development
http://microcapital.org/microfinanceuniverse/tiki-index.php?page=OPEC+Fund+for+International+Development

MicroCapital Universe Profile: PROPARCO
http://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=PROPARCO

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