MICROCAPITAL BRIEF: Hatton National Bank Borrows $60m from PROPARCO for SMEs in Sri Lanka

Hatton National Bank (HNB), a Sri Lanka-based financial institution, recently agreed to borrow USD 60 million from Promotion et Participation pour la Coopération Économique (PROPARCO), an affiliate of the French government’s Agence Française de Développement (AFD), to on-lend to small and medium-sized enterprises (SMEs).

“We are delighted to enter into this long-term loan agreement with PROPARCO at such a critical juncture in the history of the global economy. This is the second time HNB is partnering with PROPARCO since 2015. The agreement is a clear testimony for the confidence placed in HNB by international financial institutions especially within the context of the overhanging uncertainty on account of the COVID-19 pandemic,” said HNB Managing Director and CEO Jonathan Alles.

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. During the 2019 fiscal year, the bank generated a return of 1.27 percent on total assets of LKR 1.1 trillion (USD 6.1 billion).

PROPARCO is the private-sector financing subsidiary of the AFD Group, which is composed of AFD and PROPARCO. PROPARCO funds financial institutions and other businesses in Africa, Asia, Latin America and the Middle East to promote sectors such as agribusiness, education and renewable energy. In 2019, the AFD Group reached total commitments of EUR 11.4 billion (USD 12.8 billion), including EUR 1.6 billion (USD 1.8 billion) issued by PROPARCO.

By Kate Finster, Research Associate

Sources and Additional Resources

PROPARCO press release
https://www.proparco.fr/en/actualites/sri-lanka-supporting-smes-rural-areas-hatton-national-bank?origin=/en/actualites

HNB homepage
https://www.hnb.net

HNB 2019 annual report
https://www.hnb.net/images/annual_reports/2019/integrated-report-2019.pdf

PROPARCO homepage
https://www.proparco.fr

PROPARCO 2019 financial report
https://www.proparco.fr/en/ressources/financial-report-proparco-2019

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